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Minnesota Legislature debates tough cuts

ST. PAUL - Most state agencies would cut budgets 3 percent to 4 percent, various funds would be raided and budget reserves would fall as Minnesota legislators try to balance the state budget.

The House and Senate debated different, but similar, bills Thursday to fill a projected $935 million state budget deficit. Debate went well into the night.

But the lengthy debates were just an early step in the budget-balancing act because many proposals from the Democratic-controlled Legislature do not match Republican Gov. Tim Pawlenty's budget plan.

The House and Senate would increase funding for public schools while cutting many agencies' budgets less than the governor proposed.

Last year, lawmakers approved a $34.7 billion, two-year budget. Thursday's bills were to tweak that budget as a sluggish economy affects the state.

Thursday's bills propose some revenue increases, including closing a corporate tax loophole, to help reduce the deficit. The bills also take funds from the state budget reserve fund and other funds throughout state government to plug the hole.

Democratic leaders said they did the best they could to preserve programs while also cutting deeply enough to balance the budget. They said it was painful.

"This bill is not a pleasant bill, but it's a bill that we have to pass," said Senate Finance Chairman Dick Cohen, DFL-St. Paul.

Like a public works funding bill legislators passed a day earlier, the budget bills they debated Thursday set up a battle with Pawlenty.

"The budget bills are ... filled with stuff that defund my priorities and don't go far enough to address the budget deficit in a way that I would like," Pawlenty said. "So, they're concerning, but hopefully we'll be able to work out a compromise in conference committee."

Committee chairmen said they tried to craft a budget fix that did little harm to programs. But House Health Care Chairman Tom Huntley, DFL-Duluth, said he could not avoid all pain.

"We do have severe cuts to hospitals," Huntley said.

The House bill cuts $45 million from hospitals, but because the federal government matches that money with its own aid, Minnesota hospitals more likely would lose $90 million, he said.

"That is the only thing I could do in this bill to protect nursing homes and long-term care facilities," Huntley added.

The House and Senate both put more money into nursing homes than Pawlenty proposed, enough to give workers pay increases next year. Pawlenty's proposal would not have allowed those raises.

While most finance chairmen decried cuts they were forced to make, education leaders took a different view.

"This is a ray of sunshine," said House Education Finance Chairwoman Mindy Greiling, DFL-Roseville.

The House bill would raise per-pupil state funding $51, while the Senate supports raising state funding $35 per student.

"It is with great pleasure and a little bit of a sense of humility that E-12 education has fared better than many of the other divisions," Senate Education Finance Chairman LeRoy Stumpf, DFL-Plummer, said about his early-childhood-through-high-school funding bill.

Stumpf and Greiling get money by killing or slowing Pawlenty's Q-Comp program that changes how teachers are paid from traditional tenure-based systems to a more merit-based form.

Rep. Tom Rukavina, DFL-Virginia, and Sen. Sandy Pappas, DFL-St. Paul - the top higher education lawmakers - said their bills treat public colleges and universities better than the governor. They said their bills would not require higher tuitions, but the governor's proposed cuts would.

Sen. Ellen Anderson, DFL-St. Paul, said the Senate bill cuts $13 million from environment and natural resources programs. Anderson said senators accepted some Pawlenty budget proposals, but did not target park and clean water funding.

"What we did was focus on reducing the increases that some programs received (last year)," Anderson said. That included a $1.5 million cut to a program promoting expansion of E85 fuel, a mix of 85 percent ethanol and 15 percent gasoline. The program still has enough funding to continue, she said.

State Capitol Bureau reporter Scott Wente contributed to this report

Davis works for Forum Communications Co., which owns The Forum. He can be reached at (651) 290-0707 or