The governor’s proposal to cut nearly $2.7 billion from the state’s biennial budget by executive action would be “unwise and not in the interest of the State’s long-term fiscal stability,” according to the text of the resolution, which was adopted 6-0. (Watch the meeting in Real Media or Windows Media format)
The commission’s vote came on the heels of a heated meeting in which lawmakers questioned the potential impacts of Pawlenty’s plan — and also accused him of abusing his authority.
State Economist Tom Stinson told the all-DFL panel that the proposed unallotments would result in somewhere between 3,300 and 4,700 public- and private-sector job losses. He added that the DFL’s own budget-balancing proposal — a $1 billion tax increases coupled with K-12 payment shifts — would have resulted in approximately 1,000 job losses.
House Majority Leader Tony Sertich (DFL-Chisholm) took Stinson’s testimony as evidence the governor had made a mistake.
“Getting hard data from our economist states that Gov. Pawlenty’s proposal is going to cost three to five times as many jobs,” Sertich said.
Although he didn’t dispute the layoff predictions, Finance Commissioner Tom Hanson defended the governor’s plan, arguing that tax increases would have put Minnesota at a long-term competitive disadvantage with other states.
“It is our view that the governor’s plan will put us in a better position to recover from this recession,” Hanson said.
Commission members questioned the assertion that the governor’s plan wouldn’t raise taxes, however. Sen. Tom Bakk (DFL-Cook) cited testimony from Revenue Commissioner Ward Einess that property taxes were likely to increase $238 million over the course of the next biennium as a result of local government aid unallotments.
House Speaker Margaret Anderson Kelliher (DFL-Mpls) said Pawlenty’s plan is unprecedented, and added that legislation will be proposed next year to curb the governor’s unallotment powers.
“I believe that you and the governor have taken the unallotment statute far too far,” she told Hanson.
Arguing that unallotment could have been avoided, Hanson blamed DFL leaders for ignoring the governor’s insistence on not raising taxes. He said the governor was acting well within his statutory powers.
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