As the 86th two-year session of the Minnesota legislature gets under way, Gov. Tim Pawlenty says there’s at least one option off the table to fix a state budget that faces a $4.8 billion shortfall: raising taxes.
“This challenge is going to be very difficult,” Pawlenty told leaders gathered at his Government Reform Summit on Monday. “[I]nterest groups, the stakeholders, legislators, I think, all understand that we can’t take a ‘business as usual’ approach.”
But despite his call to avoid a “‘business as usual’ approach,” Pawlenty said increasing taxes would be off the table. Minnesota hasn’t increased revenues in a decade. The period from 1997 to 2001 saw massive tax cuts and refunds in the form of “Jesse checks” (named after then-Gov. Jesse Ventura) and with the exception of Pawlenty’s 21 percent increase in fees, his “no new taxes” pledge has held from 2002 to 2008.
The co-chair for the campaign of John McCain invoked President-elect Barack Obama’s policy of holding off on tax increases until a stimulus package is passed. “It’s not wise [to increase taxes],” Pawlenty said. “It is not what President-elect (Barack) Obama is doing.”
However, Minnesota cannot legally run a budget deficit and the federal government can.
“We should live within what we’ve got,” Pawlenty said.
And we don’t have much. As Britt Robson reported for the Minnesota Independent in July, Pawlenty presided over $2.7 billion in tax cuts as House Majority leader and has resisted any tax increase in his seven years as governor. Minnesota government took a $4.3 billion cut in 2003 because of those tax cuts and the refusal to increase the amount of money the state takes in. Education, one of Minnesota’s strongest economic drivers, took a big hit.
The structure of the tax cuts has created a regressive tax system, a fact the governor’s own tax study demonstrates. Those with less means are paying a larger portion of their income on taxes than those who are wealthy.
Pawlenty plans to combine government services and make cuts to state-sponsored health insurance and other health and human services programs.
“Ideas that were offered include paying for performance, redesigning local government aid, getting better value in health care, reforming chemical-dependency programs, making early childhood programs stronger and more targeted, and connecting higher education to workforce needs,” Pawlenty spokesman Brian McClung said. “We’ll be exploring these and other ideas as the governor puts together his budget recommendations.”
A letter to the editor of the Star Tribune had a novel idea of where some money might be saved. “I’d say Tim Pawlenty’s salary of $120,000 is more than he deserved for the results of his efforts: a $5.2 billion deficit,” said Marcia Aubineau of St. Paul.