Caledonia Argus

Elected officials brace for state budget shortfall

Posted: 1/7/03

by Andrew Miller
Argus News Reporter

An economic forecast released on December 4 predicted a $4.5 billion state budget shortfall. With the 2003 MN legislative session beginning this week, area state legislators are anticipating intense debate in the coming months as state senators and representatives devise a budget resolution.

ìItís a mess, itís a terrible mess,î said District 31B Representative Greg Davids. ìIím not envied by many people right now. But going into this session, Iím excitedñ this is what itís all about, this is when you see what youíre made of. Itís going to be a fascinating session.î

The deficit, Davids noted, is attributable to a state economic recession that came in the wake of September 11, 2001.

ìWhen we left (the legislative session) in 2001, we put it (the budget) together where we knew we were headed toward a mild recession,î Davids said. ìSeptember 11 hit and it put us down the tank. Thatís what got us. Northwest Airlines laid off 5000,î and for each NWA employee laid off, two other workers were laid off elsewhere in the state.

ìThe other thingî he added, ìis that the stock market has just killed us. Weíre down now and itís tough, but weíll come out of it and the next six months are going to be better.î

Davids expects the budget shortfall to be resolved through a combination of tax increases and cuts in funding. He predicts that the budget resolution will be reached via the following courseñ first, the legislature will pass a budget with a number of cuts and increases, Pawlenty will veto the legislatureís resolution, and sometime in August, the legislature will override Pawlentyís veto.

Davids, though not an outspoken advocate of tax increases, said that when the legislature has dealt with a dramatic budget shortfall in the past, increases have been necessary. Now in his seventh term as a state rep, Davids has seen similiar financial conundrums in the past, and the strategy he foresees the legislature will take this year has been effective in other years in which a deficit threatened the stateís economy, noting, ìhowíd we solve it back then? we made some cuts and we raised some taxes.î

ìIím not out there saying Iím a big fan of raising taxes, but when youíre looking at $4.5 billion in deficits, itís not going to be easy,î Davids said. ìIím the last guy that wants to raise taxes, but Iím also the last guy that wants to kick grandma out of the nursing home.î

District 32 State Senator Bob Kierlin expects that, once Pawlenty releases his budget proposal, most changes to it will be initiated by the Senate, since the Democrat-controlled Senate will be more inclined to alter the Republican governorís proposal.

ìThe House has to initiate all the spending and taxing bills, so theyíll get first crack at it,î Kierlin said. But the House, he added, has a Republican majority, and ìmy guess is there wonít be substantial changes (to the governorís budget proposal) in the House.î

For now, Kierlin said, how the legislature will deal with the budget situation is up in the air.

ìWe donít know what exactly will be the plan,î Kierlin noted. ìEveryoneís got their own ideas right now, but until the governorís office publishes the budget, itís hard to say how the deficit will be dealt with.î

As state legislators prepare to deal with the budget crisis during their session, local politicians have begun talks and taken measures to safeguard against potential cuts in funding.

Houston County Commissioner Ann Thompson of Caledonia expects the shortfall to have big effects, but hopes the county can avoid severe cuts.

ìItís going to have big implicationsñ weíre part of the state system and we know itís going to affect us,î Thompson said. ìWe just want it to have the least effect it can possibly have.î

The Association of MN Counties met on January 3, Thompson noted, to ìdecide how counties will work together to make sure weíre not the brunt of the cuts, and to come up with some kind of resolution to present to the legislature.î

Commissioner Kevin Kelleher attended the January 1 meeting, the aim of which was to determine the role of counties in the economic environment that will result when state legislators deal with the budget shortfall.

The basic strategy of counties at this stage in the game, Kelleher mentioned, is to ask state officials which programs they want cut at the county level, and which mandates they find difficult or unnecessary. The role of state government, he noted, is to define the function of counties and, in the face of major budget cuts, this role is becoming increasingly important.

ìOur job is to do what the state wants us to do,î Kelleher said. ìSo weíve asked the department heads to give us information on mandates theyíre finding difficult, and weíve asked the legislature, ëwhat do you want us to cut?í Weíre putting the ball back in their (the stateís) court; now itís their turn to examine and reassess what the counties need.î

City officials have also begun talks as to how potential cuts in funding will be dealt with, but since it is unclear what types of funding will be cut at the local level, officials must wait until the state legislature passes a budget resolution before action can be taken.

ìItís something that weíve discussed briefly,î said Caledonia Mayor Bob Burns. ìWe know thereís going to be cuts, but we donít know how thatís going to transcend down to the counties, cities and townships. We have to wait and see what they (the state) will do; hopefully theyíll keep it in their own yard.î

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