Prefacing his revised 2010-2011 biennial budget as containing “some good news,” Gov. Tim Pawlenty laid out changes reflecting more than a $1 billion decrease in revenue and expenditures from his January proposal.
The budget change is in response to the state’s February Forecast that foretells of a more than $6 billion deficit for the upcoming biennium. But it also takes into account federal stimulus funds the state expects to receive.
The governor’s spending plan comes in at $32.4 billion over the biennium, which begins July 1. It reflects an approximately 4 percent decrease from the $33.9 billion in General Fund expenditures in the current budget. (Watch the press conference.)
His new budget would:
• increase K-12 education funding beyond what was previously proposed;
• restore his January proposed cuts to higher education;
• exempt unemployment insurance benefits from state taxes up to $2,400 per individual;
• provide an addition $10 million for operation of state courts;
• move short-term offenders from county facilities to state prisons;
• provide more than $10 million for a contingency fund to ensure state match for federal stimulus fund grants; and
• reconfigure the General Assistance Medical Care program eliminated hospital and emergency care coverage.
Pawlenty said that his proposal relies on no new taxes, but retains use of in one-time funds gained through the sale of “tobacco appropriation bonds,” that would essentially bond for half of 20 years’ worth of future revenues from the state’s decade-old tobacco settlement.
Although they said they had not seen the governor’s actual budget, House leaders reacted to reports.
House Speaker Margaret Anderson Kelliher (DFL-Mpls) called the governor’s budget “unrealistic” because it relies heavily on one-time revenue including federal stimulus funds and accounting shifts. House Majority Leader Tony Sertich (DFL-Chisholm) said the proposal to increase spending while the state faces a deficit “defies logic.”
House DFL leadership expects to release budget targets by the end of the week.