AFL-CIO: Budget “kicks struggling Minnesotans while they are down”

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By taking a slash-and-burn approach, Governor Tim Pawlenty’s proposed state budget will put more Minnesotans in the unemployment line and swell the ranks of the uninsured and homeless, union leaders and other advocates said.

Pawlenty, in proposal unveiled Tuesday, plans to erase the projected $4.8 billion shortfall in the state’s two-year budget by cutting spending by $2.5 billion and relying on federal government help and other resources for $3.2 billion. At the same time, he proposes millions in spending increases through tax breaks for businesses.

The governor’s proposal “kicks struggling Minnesotans while they are down,” said Minnesota AFL-CIO President Ray Waldron. “His budget will put people out of work, out of their homes and out of the nursing homes where they are being cared for.”

Given the miserable failure of the Bush administration’s economic approach, it’s surprising that Pawlenty would rely on “trickle-down” solutions like business tax breaks, others said.

“This same no-new-taxes experiment was imposed earlier this decade to address a budget crisis and Minnesota’s economy is now underperforming the nation’s economy for the first time in decades,” said Dane Smith, president of the nonpartisan organization Growth & Justice.

“We can’t balance the budget with revenue increases alone and reductions in state and local government spending and programs undoubtedly should be PART of the solution. But this historic crisis means we also will need to raise revenue, fairly, and preferably from those most able to afford it.”

Wayne Cox, director of Minnesota Citizens for Tax Justice, said Pawlenty’s plan “would deepen Minnesota’s recession.”

“Piling on public sector job loss on top of private sector job loss will worsen Minnesota’s economy,” he said. “Taking even more paychecks off of Main Street is not the way to help Minnesota’s businesses.

“He proposes to cut $2.5 billion in public sector spending. Most of that money is spent in the form of jobs. The health care sector will be very hard hit. The cutbacks at Hennepin County Medical Center are just the tip of the iceberg. Thousands will face reduced access to health care.

“The Legislature needs to provide better solutions than the ones the governor has offered.”

At a time when home foreclosures and the crisis in the housing market are making daily headlines, Pawlenty would slash the amount the state spends to help people stay in their homes and stabilize neighborhoods.

The proposed budget also failed to recognize that investing in housing creates jobs and stimulates the economy, said Chip Halbach, executive director for the Minnesota Housing Partnership.

“Clearly it’s a disconnect,” Halbach added. “The governor missed an opportunity to generate jobs and help families displaced by the housing crisis. Renters are hit particularly hard and through no fault of their own. Many lost their homes because the landlord went into foreclosure while the proposed cuts impact rental units the most.”

Recommended allocations for housing will drop from $114 million in 2009-10 to $85.4 million in 2010-11, Halbach said.

And while Pawlenty proposes to spend more in the next two years on health care for the uninsured, fewer people will be covered because the plan does nothing to control skyrocketing costs.

Under the governor’s budget, 84,000 adults – most enrolled in the state-operated MinnesotaCare plan – will lose coverage. The governor also cuts millions of dollars in payments to hospitals and long-term care providers and eliminates dental coverage for all but pregnant women and children.

While Pawlenty pledged to maintain funding for education, his proposals “distract from the actual problem: a broken education funding system,” said Tom Dooher, president of Education Minnesota. the union of 70,000 educators.

“His budget offers no new money to help public K-12 schools meet rising operating costs and maintain programs. Instead, his proposed increases would pay for a mandatory expansion of his ‘Q Comp’ performance pay plan, and pave the way for him to link all future funding increases to improved student performance.

“At the same time, the governor uses short-term thinking by shifting the timing of payments that will require school districts to borrow the money to meet cash flow needs.

“And higher education would take another unacceptable hit. An 11.5 percent reduction to the general fund operating budgets of both the Minnesota State Colleges and Universities and the University of Minnesota will do nothing to help develop the highly educated workforce Minnesota needs.”

Dooher concluded, “Overall, the governor’s proposals do not meet the long-term needs of our schools and our society. This is exactly the time we need invest in all public services that will help our state prosper.”

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