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Tight budget faces lawmakers

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Tight budget faces lawmakers
Rosemount Minnesota P.O. Box 192 / 312 Oak St. 55024

ST. PAUL - Many Minnesota legislators' dreams of significantly increasing education and health-care funding may have come to a screeching halt.

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Figures Senate leaders released Thursday show budget growth large enough to cover inflation and pretty much nothing more. That means no all-day, every-day kindergarten.

That means covering all Minnesota children with health care insurance may have to wait.

That means little more can be done for pre-schoolers.

That means there might be no chance to keep college tuition rates static.

In short, the budget numbers - known in the Capitol as "targets" - show a state budget surplus was just enough to cover inflation.

"We're going to struggle immensely to address the education needs of the next two years with that target," said Chairman LeRoy Stumpf of the Senate education finance division.

The Plummer Democrat's comments were echoed by other chairmen who said they are disappointed that the public's expectations cannot be met.

Senate Democrats would not rule out tax increases, although they downplayed the possibilities of raising any general taxes.

At the same time, House Democratic leaders were asking their colleagues what taxes they would raise if they thought more revenue was needed.

Under the Senate targets, public education would get the most of $1.3 billion in new money -- $498 million in the next two years. Following would be higher education ($296 million) and health and human services ($245 million). Other parts of the budget would get relatively insignificant increases considering the total state spending will top $34 billion over the next two years.

Stumpf told his committee that finance chairmen "have been fighting" over what relatively little money is available.

His $498 million addition is about the same as needed to fully fund special education needs. However, Stumpf's budget could not fund both special education and inflation costs.

Higher Education Chairwoman Sandy Pappas, DFL-St. Paul, said college and university funding is far from enough.

"We are starving higher education," she said.

Pappas predicted existing plans to increase public college and university tuition about 4 percent each of the next two years may jump to twice that much.

Sen. Linda Berglin, who leads the Senate health care finance committee, said her $245 million increase could at least provide subsidized health insurance to another 52,000 uninsured Minnesotans and pay for an annual state funding increase of at least 2 percent to nursing homes.

"People will wish there was more," Berglin said.

Berglin, DFL-Minneapolis, said she plans to draft her budget bill assuming no new tax money will be available to spend.

If there are any state tax increases, they probably will go to lower local property taxes, Sen. Rod Skoe, DFL-Clearbrook said. Skoe, the Senate property tax chairman, said decisions are yet to be made about raising taxes.

Assistant Senate Majority Leader Tarryl Clark, DFL-St. Cloud, would not rule out a tax increase, but did say: "We cannot do anything else unless we raise revenue."

While Senate Democrats were downplaying the chance of a tax increase, House Democrats were telling their leaders what - if any - taxes they would increase.

"It's important in our caucus to know where every member is at and how to fund priorities," Assistant Majority Leader Frank Moe, DFL-Bemidji, said.

The question about taxes was being asked - answers have yet to be compiled - but Moe said: "It is close in our caucus whether we want to and are willing to raise additional revenue."

Information such as the tax question will help House leaders compile fiscal targets like the Senate released Thursday, Ways and Means Chairman Loren Solberg, DFL-Grand Rapids, said. Those targets are due by March 25.

House Majority Leader Tony Sertich, DFL-Chisholm, said there is not as much money available as expected, so Democrats are "looking at a variety of options."

A statewide poll released by business organizations indicated 54 percent of Minnesotans say taxes are too high, while 42 percent tab them "about right."

Also Thursday, Gov. Tim Pawlenty released a slightly revised budget proposal.

Changes he suggests include moving $44 million from a health-care account to the state general fund. He also wants to bump up the state's reserves $100 million, leaving $800 million to carry over to the next budget.

Rep. Morrie Lanning, R-Moorhead, said the current budget level means he doesn't see any need to raise taxes.

"I think 9.3 percent in additional revenue should be enough to meet our needs," he said.

Rep. Kent Eken, DFL-Twin Valley, wasn't comfortable with what's left in state coffers.

"I don't think there's much there to spend," he said.

Eken said legislators can either do "one thing well or several things poorly."

That one thing, he said, ought to be property tax relief, through a mix of Local Government Aid, county aid and school levy buybacks.

State Capitol Bureau reporters Scott Wente and Mike Longaecker contributed to this story.

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Don Davis
Don Davis has been the Forum Communications Minnesota Capitol Bureau chief since 2001, covering state government and politics for two dozen newspapers in the state. Don also blogs at Capital Chatter on Areavoices.
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