Been there, done that: Lyndon Carlson and Al Quie on the budget crisis

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Call it déjà Vu for Rep. Lyndon Carlson Sr.The Crystal DFLer was serving his fifth term in the House during the 1981-1982 biennium when the shoe dropped on the economy, sending Minnesota’s unemployment numbers and interest rates skyrocketing, and the farm economy and state’s budget into the tank. With the state now facing a projected $4.85 billion biennial deficit and increasing unemployment, for Carlson it’s like history repeating itself. As a member of the House Appropriations Committee and chair of its education division in 1981, he was in the thick of the discussion to balance the $8.2 billion biennial General Fund budget that was sliding into a $778 million hole. Today, Carlson chairs the 2009 counterpart to the appropriations committee — the House Finance Committee, where any bill with fiscal implications (except for taxes) flows through, thus putting him, once again, smack in the middle of budget discussions. He is open to every piece of advice, but says the past can be a great teacher. Continue Reading

Federal dollars should create jobs, not plug budget potholes

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This past week found Minnesota state and local government officials scrambling for ways to use federal economic rescue funds to plug budget shortfalls to more thoughtful pausing to reflect on best ways to grow the economy. These two objectives don’t need to contradict each other. But they can; the helter-skelter scramble in states all across the nation may find local and state governments undermining federal economic recovery efforts. If state and local efforts lead to more job losses, budget balancing at local levels will undo federal efforts. If state and local actions lead to more people going without health insurance, the burden of meeting basic healthcare needs are shifted to others’ insurance plans and to local budgets – a certain drag on the overall economy. Continue Reading

“Tough decisions”

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Gov. Tim Pawlenty presented his preliminary answer to the state’s $4.8 billion question on Jan. 27. His proposal? Fix the state’s projected budget deficit with $2.5 billion in spending cuts, $1.3 billion in accounting shifts, nearly $1 billion in “tobacco appropriation bonds” and an unknown amount of federal stimulus dollars. The math is complicated, but the result would be to shrink state government by 2.2 percent, or $750 million, from current biennial spending levels. Continue Reading

Pawlenty proposes $151 million cut to U

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In a move that would cut $151 million from the University of Minnesota’s state aid over the next two years, Gov. Tim Pawlenty proposed a cut Tuesday of more than 8 percent from state higher education for the upcoming 2010-11 biennium. The state faces a nearly $5 billion budget deficit due to falling revenues, a number that is expected to grow in the coming months. At $33.6 billion, Pawlenty’s projected budget would be 2.2 percent smaller than that of the current biennium. Pawlenty would reduce the deficit by cutting more than $2.5 billion in spending. He would round out the remainder of the deficit through almost $3.2 billion in revenue increases, including a projected $920 million in federal stimulus money and delayed payments to K-12 education. Continue Reading

Governor Pawlenty budget address

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Entire presentation and press conference from Jan 27, 2009. Gov. Pawlenty unveils a balanced budget, sure to be met with a healthy debate in the MN legislature. Continue Reading

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.” Continue Reading

Governor proposes 2.2 percent budget cut

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Gov. Tim Pawlenty unveiled his plan to fix the state’s projected $4.8 billion biennial budget deficit using budget cuts, accounting shifts, federal stimulus dollars and nearly $1 billion in “tobacco appropriation bonds.”
In sum, the governor’s budget proposals would shrink the state government by 2.2 percent, or $750 million, over current spending levels. Among the areas hardest-hit by his proposed spending reductions would be health and human services, local government aid and higher education. “This budget involves some tough decisions — we realize that,” Pawlenty said. (Watch the announcement.)
Although no children would lose health coverage under the proposals, Human Services Commissioner Cal Ludeman said nearly 84,000 adults would likely lose their eligibility for state health care programs over the next two years. K-12 education would actually see a funding increase under the governor’s proposals, with a focus on Q-Comp and other pay-for-performance initiatives; however, accounting shifts in the area of aid payments to schools are called for to temporarily save the state nearly $1.3 billion. Continue Reading

Budget bloodletting: Grim outlook for health and human services

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In his State of the State speech earlier this month, Gov. Tim Pawlenty focused on the good news. He promised not to cut K-12 education funding. He vowed not to drop any children from state-backed health-insurance programs. The governor even proposed slashing taxes for corporations by 50 percent to spur job growth. Missing from the speech was any realistic assessment of what those proposals would mean for other areas of the state budget if enacted. The reality of Minnesota’s looming fiscal mess, with the deficit expected to eventually top $5 billion, will become more clear when Pawlenty unveils his proposed budget on Tuesday. Continue Reading

More bad budget news

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The January economic update from Minnesota Management & Budget (formerly the Department of Finance) has revealed that tax collections in November and December of 2008 were below forecasted amounts, adding another $131 million to the state’s projected budget deficit for the current FY 2008-09 biennium. In December, Governor Pawlenty drained the state’s budget reserve and made deep budget cuts (largely in the form of aid reductions to local governments) to address a $426 million deficit projected in the November forecast. Within a month of these actions, state revenues fell another $131 million. By state law, the Governor and Legislature must balance Minnesota’s budget before the end of the FY 2008-09 biennium on June 30. November and December corporate tax collections were $57 million (42 percent) below forecast levels. Continue Reading