Minn. GOP's first budget pass: $1 billion in trims

Republican leaders turned to familiar targets in their first crack at taming the state's multibillion-dollar deficit, proposing $1 billion in reductions that would hit local governments, colleges and low-income residents.

Lawmakers unveiled the package of a dozen cuts Tuesday that they plan to have on DFL Gov. Mark Dayton's desk by early February. They framed the plan as Phase One of what they expect to be several rounds of deep and painful reductions.

"When you know you are out of money, stop spending," said House Ways and Means Committee Chairwoman Mary Liz Holberg, R-Lakeville.

In a stern rebuke, Dayton dismissed what he called Republicans' "piecemeal cuts and partial solutions," that patch only a fraction of the state's $6.2 billion two-year budget hole.

Dayton then called on legislators to hold off until he unveils his own budget proposal Feb. 15. He said their input should come only after "citizen participation through hearings and very careful consideration of the effects of their decisions on people's lives."

The GOP plan mirrors temporary spending cuts imposed by former Gov. Tim Pawlenty that DFLers ultimately agreed to last year.

Pawlenty's cuts were supposed to reset back to their old levels after the current budget cycle. The new plan would extend them at least two more years.

Local government leaders, who have already been smacked with millions of dollars in state aid cuts, accused Republicans of clinging to "failed policies" left behind by Pawlenty.

State revenue officials have found that for every dollar in reduced state aid, local property taxes go up 63 cents. By that measure, property taxpayers could be tapped for another $300 million to make up the difference.

Park Rapids Mayor Nancy Carroll, president of the Coalition of Greater Minnesota Cities, called the proposed cuts "just more of the same: A continued shift in the tax burden onto middle class families and businesses and deep cuts to the communities they call home."

Senate Finance Committee chairwoman Claire Robling, R-Jordan, noted these same cuts won bipartisan approval last year. No one should be surprised, she said, that the cuts are in the mix again as the state faces an even bleaker long-term budget picture.

"Most of them are expecting these to be continued," she said.

A weakened safety net?

With the federal windfall spent, the cuts "will further erode the state's already-weakened safety net programs," said Sen. Linda Berglin, a ranking DFLer on health and human services. Another part of the GOP's proposal calls for cutting roughly $200 million from state agencies.

But rather than imposing specific cuts, the GOP is asking Dayton to slice the money.

The idea came from what Republicans called "Christmas in June," a phenomenon in which they say state agencies rack up unnecessary purchases and upgrades to justify their budgets in the next cycle.

The proof? Republicans listed two reports of departments in Pawlenty's administration that bought 50 chairs and a new laptop for an employee who was leaving in days and who was not being replaced.

First, their GOP rivals proposed cutting corporate taxes by $200 million.

Now, DFLers argue, the GOP wants to pay for the tax breaks by cutting nearly that much from low-income residents and renters.

"This is a very troubling trend to continue going down," said Senate Minority Leader Tom Bakk, DFL-Cook.

It's also a path that could lead to a testy showdown between the feisty GOP majority and a new governor who has vowed to balance the budget with a mix of tax increases and spending cuts.

Republicans have stood firmly behind a campaign-tested pledge to balance the budget solely through cuts.

So far, neither side has shown any willingness to budge.

"We came here to bring solutions," said Senate Majority Leader Amy Koch, R-Buffalo. "We think this is a solution that makes sense."