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February 5, 2003

Pawlenty meeting with legislators as cuts draw near

David Phelps
Star Tribune

Published Feb. 5, 2003

Gov. Tim Pawlenty will meet with legislative leaders this morning to take the first official steps toward balancing the current state budget through his office's authority to cut funds unilaterally.

Pawlenty, faced with a $356 million shortfall between now and June 30, the end of the fiscal year, said Tuesday that he will "outline our intention in terms of timing and substance" but not in detail to the Legislative Advisory Commission.

He has given the Legislature until the end of this week to draft a compromise budget-cutting package for the current fiscal year. If legislators don't reach a deal, Pawlenty said, he'll make his cuts -- or "unallot" -- no later than Friday.

The DFL-controlled Senate and Republican-controlled House remain at odds over the budget but agree on some key elements.

Pawlenty said his unallotment package will look similar to his $468 million budget-balancing plan released last month, which included cuts to state agencies and in programs such as ethanol subsidies and an economic development fund for northeastern Minnesota.

The Senate and the House have agreed to the broad elements of a package that would total $461 million, leaving a $129 million cushion in case of further declines in state revenue collections. The two bodies also would maintain most of the state's $27 million in ethanol payments and would protect all but $7 million of the $59 million 21st Century Minerals Fund for northeastern Minnesota.

In dispute is how much to cut from the budget for the 2004-05 biennium -- for which a deficit of $4.2 billion is projected -- through spending reductions in '03. The House wants permanent spending reductions of $400 million during the next two years. The Senate proposal is for about $198 million in cuts.

House Republicans also raised concerns about the Senate proposal to use $43 million from a state employee health insurance reserve fund. DFLers don't like the House insistence, endorsed by Pawlenty, to allow departments and agencies to contract out more services to private firms and to require workers to take time off.

Pawlenty said he is ready to start making cuts.

"I'm prepared to unallot. I'd prefer to get an agreement with the Legislature. This is a collaborative process," he said. "I said the end of the first week in February [for a legislative agreement] and I mean it. We're ready to go. . . . It will get resolved one way or another this week."

 

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