Legislators face session fraught with peril

Legislators returning to St. Paul this week know they'll need to approach the 2010 session as delicately as if they were defusing a bomb. Several elements could blow up in their faces: a short-term $1.2 billion deficit; deep cuts that could enrage voters and a desperate, statewide need for jobs.

Those with their hands on the wires include a lame-duck governor testing a run for president, legislative leaders jockeying to replace him and two chambers up for reelection.

"We know what needs to be done, but the road ahead is a little foggy," said House Finance Committee Chairman Lyndon Carlson, DFL-Crystal.

One thing they won't do is march to the Capitol on the first day waving proposals for tax increases. Despite sizable majorities in both bodies and what they say is a need for more revenue, DFLers have mostly given up on proposing tax increases with Gov. Tim Pawlenty in office.

"If it's not going to work, why go through it?" asked Senate President James Metzen, DFL-South St. Paul.

Instead, legislators hope to pass a bonding bill in the first weeks and then move on to the real work: revamping the state's ailing budget.

Bonding = jobs

This year, lawmakers and Pawlenty are at odds over how much the state can do.

Pawlenty would borrow $685 million in bonding, with nearly a third of that going to colleges and universities. Pawlenty says the state can't afford to go higher without driving up its debt service -- the total interest on outstanding bonds.

Democrats want $1 billion -- more typical of some bonding sessions and, they say, a smart move at a time of rock-bottom interest rates and bargain-priced labor.

If they can't agree, DFLers may have to start on the unenviable task of attempting to win over Republicans for a veto-proof majority on a bonding bill.

"The governor won't be afraid to use his veto pen to trim the bonding bill or, if necessary, to veto the entire bill, to ensure it is appropriate and affordable," said Brian McClung, Pawlenty's deputy chief of staff.

While the economy is improving, Minnesota still faces a $1.2 billion deficit by the summer of 2011 that could swell to $5.4 billion by 2013.

Every day of delay costs the state $50 million, putting more of the budget off-limits and deepening cuts for what's left.

"That means difficult cuts will be on the table," McClung said. "It means finding ways to streamline and reduce the size of state government. It means not increasing government spending when we already can't afford the spending we've got."

Pawlenty is expected to release his budget proposal in February.

Balancing the budget solely through cuts would result in a menu of grim, politically unpalatable options. Roughly 75 percent of the budget goes to education, aid to local governments and health and human services. Cut health and human services, and the state can lose federal funding. Cut aid to cities, and property taxes rise. Cut higher education, and watch tuition soar.

"This would be a moment for him to come forward with honest budget reductions," said Senate Majority Leader Larry Pogemiller, DFL-Minneapolis.

Republicans say Democrats have proven unwilling to cut programs dear to their constituents.

"At some point, someone has to be an adult in the building and balance the budget," said gubernatorial candidate and state Rep. Marty Seifert, R-Marshall.

Tom Bakk, Senate Tax Committee chairman, will offer a tax proposal later in the session that would generate about $300 million, but he declined to offer more details. The proposal would mesh with another plan to cut taxes for businesses.

"It's pretty modest," said Bakk, who is running for governor. "I am trying to set the table to speed the recovery."

Another fuse on the bomb: the campaign season.

Despite the hard times, nearly everyone wants their seat back, or a better one. The more time lawmakers spend in St. Paul -- roughed up by bruising fights over tax proposals or cuts to popular programs -- the less time they have to woo voters.

Already, the rancor has an election-year pitch.

Republicans depict DFLers as tax addicts who refuse to cut.

Democrats say Republicans have bankrupted the state, accusing Pawlenty of being too busy polishing his national profile to solve the state's problems.

"If you let all this hyperbole swirl around, it's difficult to get things done," said Murphy, who is not running for reelection. "The bottom line is that people need to calm down and march into this problem together. It's the only way we are going to get this done."