Lori Sturdevant: Minnesota sets out on an arduous fiscal journey

Daunting deficit numbers aren't the only reason the mood at the Capitol is dispirited this December. Another is the worry that Minnesota's political system isn't up to the repair job the state's fiscal situation requires.

I've been fiddling with an analogy: Think of state government as a car with several owners. It's not a sleek new hybrid. It's a high-mileage, rough-riding clunker, with known defects that have been neglected because the owners have been locked in bitter argument over whether to operate it with high-test or low-octane fuel. Neither side in this fight has been talking -- much, anyway-- about installing new parts or rebuilding the motor.

Now comes an unexpected need to use that banged-up beater for a cross-country road trip. That's what it means to hand the current cast of State Capitol characters the task of closing a $1.2 billion gap that's developing in the biennial budget that became law less than six months ago.

The old rig might make it. Better yet, its owners might see the urgency for remedial action that goes well beyond adjusting the amount and grade of oil and gas they pour in.

But a breakdown on a lonely rural highway, with the owners left angrily screaming at each other alongside the road, is a pretty good bet.

Quitting the analogy: Chances are far too high that come next May, the constitutional clock will run out on the 2010 Legislature with no agreement between GOP Gov. Tim Pawlenty and the DFL legislative majorities on a budget repair plan. That will leave Pawlenty to wring another $1 billion-plus out of state spending, via unallotment.

Even for a governor trying to impress his party's right wing with his conservative bona fides, that has to be an unpleasant prospect. Pawlenty signaled as much last week when he declined an opportunity to unilaterally nix a $437 million aid payment to cities and counties.

For example, consider the consequences already flowing from the impending elimination of General Assistance Medical Care (GAMC), the state's health care program for its poorest adults. As a result of GAMC's scheduled demise, safety-net hospitals and group homes are downsizing and delaying expansion plans, property taxes in Hennepin County are rising, and another government-financed health insurance program -- MinnesotaCare -- is in jeopardy.

That's not to mention the consequences for sick, poor people for whom the MinnesotaCare alternative offered by the Pawlenty administration is a poor fit. Or the insured people whose premiums will rise as the cost of indigents' medical emergencies gets shifted to everybody else.

But last week's GAMC news makes the health care safety net a columnist's two-fer. The veto-depleted program might yet prove to be not just a case study of the ill consequences of meat-ax cuts, but also an illustration of what's possible when the need to save money leads to creative reform.

On Thursday, DFL legislators unveiled a proposed scaled-down version of GAMC that avoids higher taxes and keeps most of its beneficiaries covered. It relies on reform that includes allowing counties to manage care by paying providers to practice medicine in the most cost-effective way.

The legislators admit that their ideas aren't fully formed and that more work remains to be done. Still, they appear to be on to something important.

There are alternatives to burdensome higher taxes and mean-spirited cuts, they've argued. Those alternatives involve finding new ways to do government's work and smarter ways to pay for it.

The examples these elders have often cited are major chapters in Minnesota's modern-era governance story -- the Met Council's coordination of metro services, the Minnesota Miracle equalization of school funding, the emergence of charter schools.

I've noted that those examples are dated. The charter school law, newest on that list, is nearly 20 years old.

See? the reformers counter. See how creativity goes on hiatus when politicians get bogged down in a partisan tax war?

A high-profile GAMC fix, built on a redesign of the way health care is delivered, would be more than a relief for threatened hospitals and sick people. It would be a fresh example of what could happen throughout public systems if redesign were seriously tried.

Minnesota needs a governmental and political climate that's friendly to new thinking about how best to educate the next generation, invite entrepreneurs, preserve public safety and the environment, and care for the indigent sick and elderly. It needs leaders willing to create zones of political safety for bearers of such ideas, to protect them from the wrath of defenders of the status quo.

A few weeks ago, it seemed as if it would be enough to urge Minnesotans to elect such leaders next fall. The new budget forecast says that won't do. Reform-minded leadership is needed now, to steer Minnesota out of the deficit ditch.