Republican legislators want to draw down hundreds of millions of dollars from numerous state funds to goose the state through its latest economic rough patch.
The guts of the GOP-controlled Legislature's plans for patching the state's $5 billion budget hole came into clearer focus Tuesday as the Senate approved a tax bill that would drain $216 million from the state's volatile cash-flow account. A few hours later, the House approved a plan to strip $60 million from an Iron Range economic development fund.
As the legislative session grinds on, Republicans have looked more closely at many little-known or once-sacred pots of cash to help keep their pledge to balance the budget without raising taxes or forcing deeper cuts in politically unpopular areas. But the budget balancing high-wire act could leave the state in a precarious position if the economy tanks.
Senate Taxes Chairwoman Julianne Ortman compared the state's financial picture to "an airplane that doesn't have enough gas" to make the journey.
Democrats offered a different view of the airplane imagery.
"If you are sitting up in the first-class cabin, one of Minnesota's big businesses, it's a pretty good ride for you," said Sen. Tom Bakk, DFL-Cook. "If you are sitting in the main cabin, there's a hole in the fuselage and there's smoke coming in."
Along with deep aid cuts to cities and counties, the Senate bill that was approved 37 to 26 draws down $216 million from the state's cash-flow account to balance the budget. Right now, the state has about $1.2 billion in the account, a bill-paying fund that can rise or fall by billions of dollars within weeks.
The GOP also wants to take up to $13 million from a state-run, high-risk workers compensation program for companies that can't get coverage in the private market.
All told, legislators want to siphon of tens of millions of dollars from numerous small funds used to enhance public safety or fight insurance fraud and auto theft. They even plan to slice $2.6 million from a fund designed to pay for improved communication among emergency agencies.
Legislators have proved that no pot of cash is too small for the budget straw. The Senate has targeted $7,000 in cuts from the Greenhouse Gas Advisory Council.
Republicans say the reductions most often are a painless way to help balance the budget. Many of the reductions merely draw down tiny reserve funds without hindering the work of these agencies or groups, they said.
"We've made careful reductions so we can live within our means," said Ortman, R-Chanhassen.
The House proposal withdraws $60 million from the Douglas J. Johnson fund, a decades-old program that uses taconite tax money to diversify the Iron Range economy.
Iron Range lawmakers spent more than two hours telling stories about the history of mining, the hardscrabble life they have lived and the cherished fund they created to protect future generations. If Republicans are successful, it would be the first time state leaders tapped the fund for general expenses -- a move some think might not survive a legal challenge.
"Did we do something wrong to deserve to get targeted?" asked state Rep. Tom Rukavina, DFL-Virginia. "I wouldn't steal money like you are stealing ours."
State Rep. Keith Downey, R-Edina, said the whole fight shows how the system that distributes aid to local governments has become more about political muscle than need.
State Rep. Ann Lenczewski, DFL-Bloomington, said the decision to siphon money from the Iron Range fund shows that Republicans can't live by the cuts-only budget they promised on the campaign trail.
"Have the guts to make the cuts," she said before the House passed the measure 70 to 60.
Republicans are edging closer to approving their last budget bills, even though DFL Gov. Mark Dayton has expressed grave concerns about many components of their plan and vowed to reject anything less than a complete budget package.
The Senate finished its budget bills Tuesday. The House will finish Wednesday, when it's scheduled to approve its state government finance bill and health and human services budget.
DFLers have introduced much of Dayton's budget plan -- including his trademark proposal to raise taxes on high earners -- but so far have been unable to get a hearing while Republican leaders push through their plan.
Even if the plan never gets a legislative hearing, the governor's budget likely will serve as the foundation for a final budget solution. Dayton and the GOP have until May 23 to reach a budget agreement.
Baird Helgeson • 651-222-1288