Budget ax hits Minnesota cities, counties

Residents of Minnesota cities and counties that rely on state aid took another drubbing at the State Capitol Monday.

The Minnesota House and Senate cut $105 million in aid to local governments, which has been one of Gov. Tim Pawlenty's first pots of cash to tap whenever the state has run low on money. If there was any consolation for mayors and county managers, it's that the DFL-controlled Legislature cut less than half what the governor wants to.

In the short term, legislators warned that libraries might cut hours, the streets might not be as clean, and there could be fewer police officers on the streets. In the long term, they said, Minnesotans should guard their wallets.

"These cuts ... are going to result in higher property taxes, there's no question about that," said Senate Tax Committee Chairman Tom Bakk, DFL-Cook.

The House and Senate passed the reductions as part of a sweeping budget-cutting package to plug one-third of the state's $1 billion budget hole.

Legislators slashed millions from areas that cut deep into the lives of many Minnesotans, like higher education, the environment and public safety. They want to take money from a college savings program, the Red River Watershed Management Board, and alcohol and gambling enforcement programs. They want to raise fees, too. The House wants to raise fees for barbers and cosmetologists; both chambers want to raise fees for large security brokerages that do business in the state.

"Bills like this are not easy to deal with," said Senate Finance Committee Chairman Dick Cohen, DFL-St. Paul.

Three-part process

Facing a daunting budget shortfall, the DFL legislators have decided to divide the cuts into three chunks.

Health and human service budgets will go under the knife next. If necessary, K-12 schools will be last.

Staggering the cuts will allow lawmakers to chip away at the problem while they await federal jobs and health care legislation that could wipe out up to $738 million of the state's deficit through next summer.

Between the first $300 million round of cuts and the federal money, legislators may not have to cut deeply -- or at all -- into the more politically dicey areas of health and human services and K-12 schools, where the state spends the most.

Republicans blasted DFLers for the piecemeal approach to cuts, saying it's shoddy budgeting.

"Governor Pawlenty would prefer DFLers present a complete budget plan, but we can't force them to do so," said Brian McClung, Pawlenty's deputy chief of staff. "It appears they're taking an incremental approach to hide their usual plans for a massive tax increase until the final week of session. That doesn't give the public a chance to weigh in, and it's getting old. In the meantime, we'll consider the bills the DFL passes and see if they might be workable."

DFLers have been frustrated that Republican legislators groan about the process but have not offered cuts of their own.

To test GOP resolve in making cuts, Senate Majority Leader Larry Pogemiller put Pawlenty's budget in the form of a bill to see if Republicans have the votes to impose his cuts in the same areas as DFLers' first round of reductions.

The measure failed unanimously.

That measure failed.

"It's clear there's been a rejection of the governor's budget," Pogemiller said.

House debate

In the House, the DFL majority swatted away an afternoon's worth of proposals from Republicans. DFLers and Republicans scuffled over local government aid, paying prevailing wages and removing the ban on new nuclear power plants.

In nearly all cases, the DFL majority ruled that the GOP moves were not germane to the day's immediate task of cutting. "I can see tensions on the bill are rising," said Rep. Ann Lenczewski, DFL-Bloomington, the House Taxes Committee chairwoman.

DFLers argued that the proposal was too hastily made and needed more study because the early retirements could have a significant impact on state pensions. "Only in state government is cutting government considered a [possible] cost," said a frustrated Rep. Laura Brod, R-New Prague.

Rep. Tom Rukavina, DFL-Virginia, a gubernatorial candidate, said Republicans were missing the larger point behind Monday's exercise.

"The governor has successfully starved government" with budget reductions in past years, he said. "Now you're all fighting over scraps."

But Rep. Mark Buesgens, R-Jordan, said the DFL moves would come back to the haunt the majority party in the upcoming November elections. "As we goose-step towards November, the people of Minnesota will not forget," he warned.

There are still some modest differences between the House and Senate budget-cutting proposals. A conference committee will begin to work out the differences and lawmakers hope to have the cuts on Pawlenty's desk in the next couple of weeks.

baird.helgeson@startribune.com • 651-222-1288