Pawlenty chooses fiscal discipline over tax hikes

posted at 11:15 am on December 20, 2008 by Ed Morrissey

At least for now, Minnesota will rely on government reductions in spending rather than tax hikes to eliminate budget shortfalls due to the deteriorating economy.  Tim Pawlenty unveiled $271 million in cuts yesterday afternoon, attempting to close an expected $426 million deficit for this biennial and looking towards a $4 billion deficit in the 2010-11 budget:

Friday’s emergency cuts will take immediate effect and will temporarily wipe out the short-term deficit, although Pawlenty was quick to note that a second round of reductions may be needed early next year.

“Our country and our state are facing historic financial challenges … and it’s going to require difficult decisions,” Pawlenty said as he announced the cuts. “Families across Minnesota are tightening their belts, and they expect government to do the same.”

To protect K-12 schools, the state’s single-largest spending item, Pawlenty cut more deeply from local government, health care and higher education — unappetizing choices, he noted, but necessary in the face of an economic situation that continues to worsen.

Pawlenty described the cuts as “modest” and said that despite what critics may say, there should be no need to cut into essential police and fire services. In not-so-veiled references to Minneapolis and St. Paul, Pawlenty said that so long as cities maintained their own human rights departments and cultural community liaisons, they had places to cut before touching basic services.

The legislature wanted to enact an across-the-board 1.6% cut for all state spending, but Pawlenty instead decided on prioritizing the cuts.  Thus far, he has managed to protect K-12 funding, but eventually that may fall under the knife as well.  Higher education did not fare as well, losing $20 million each to the University of Minnesota and Minnesota State Colleges and University systems.

King Banaian, chair of economics at a MnSCU school (St. Cloud State), notes the cuts and says much more draconian intervention will be needed:

You can only unallot monies that haven’t been spent, and if you sent out the LGA money on the 26th you would either have to make deeper cuts to human services and higher ed, or impose a quicky tax increase. Besides bad timing, the latter option probably is impractical in such a short period given the lag between passage of a bill and implementation. I will be waiting to see DFL reaction to this, but my expectation is that any commentary will be muted — their turn comes to deal with the $4.8 billion deficit to be closed for the upcoming biennium, so they’d be better off letting Pawlenty accept the responsibility for this without any cover or criticism.

We’re already looking around the university for money not to spend, cutting travel and looking for low-enrollment classes we might be able to cut.

I’m encouraged that the first impulse in this state and this governor was not to raise taxes but to look within government for ways to live within its means. We’re already in the top ten states for tax rates, and we need to stimulate growth by keeping capital in the markets, not by government confiscation of capital.


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its a start, good government on a state level lays the groundwork for a gop revival.

rob verdi on December 20, 2008 at 11:21 AM

I too am encouraged. Could a new day be dawning?

UltimateBob on December 20, 2008 at 11:21 AM

Don’t give Pawlenty a pat on the back, Ed. First, during his six years in office, he presided over a budget that went from 25b to near 35b. He almost did nothing to control state spending except vetoing the DFL’s even more insane spending bills. When he did budget cuts, they were to local government aid. And Pawlenty, not enacting any property tax caps, also presided over the largest property tax increase in state history. Now there’s no tax area that’s low in this state. He’s still better than a dem, but let’s be honest about his background.

IR-MN on December 20, 2008 at 11:25 AM

Could a new day be dawning?

UltimateBob on December 20, 2008 at 11:21 AM

Not hardly.

fossten on December 20, 2008 at 11:28 AM

Good on him – maybe he’s starting to see the light. Sarah is setting a good example for the other GOP governors, and now they’re trying to play catch-up.

Jim62sch on December 20, 2008 at 11:36 AM

I liked this part.

In not-so-veiled references to Minneapolis and St. Paul, Pawlenty said that so long as cities maintained their own human rights departments and cultural community liaisons, they had places to cut before touching basic services

I assume a legal challenge by CAIR is in the offing.

a capella on December 20, 2008 at 11:36 AM

Emergency cuts only go so far, if you’re looking at a year over year shortfall. Plus, though the public health sector on the state level tends to be overgrown…higher education is one of the most cost effective uses of states funds. However, I’m not familiar with his states system. I know in NY the city and state have really bent over backwards to continue to invest in the CUNY system…because even in these tough times CUNY’s numbers have risen across the board. They have superstar professors like Michio Kaku, and all student rubrics from retention rates to grades themselves have gone up. Communities gain when these investments are made…but without the higher ed leadership necessary to make these things work them money is useless…which may be the case there.

ernesto on December 20, 2008 at 11:37 AM

@ IR-MN on December 20, 2008 at 11:25 AM

Oh, you didnt get the memo? Apparently that is the new conservatism, spending epic amounts of money and expanding government.

muyoso on December 20, 2008 at 11:38 AM

@Jim62sch: Sorry, but he isn’t following Sarah Palin on this one.

strictnein on December 20, 2008 at 11:38 AM

Could a new day be dawning?

UltimateBob on December 20, 2008 at 11:21 AM

Not hardly.

fossten on December 20, 2008 at 11:28 AM

If Pawlenty can pull it off, it will make a compelling argument that taxing & spending is not sustainable, especially in times of an economic downturn.

UltimateBob on December 20, 2008 at 11:46 AM

You can make smart cuts and balance budgets…It is all this guaranteed money to useless projects that cause problems. I’m sick of “Take away your bus service” management.

tomas on December 20, 2008 at 11:51 AM

So this milksop makes a few superficial cuts in state government. Big, fat, hairy deal. He still presides over a cesspool of a state. And why isn’t he out there trying to keep Al Franken from stealing the Senate election. One of the few smart things John McCain did was not picking this wuss as his running mate.

Percy_Peabody on December 20, 2008 at 11:54 AM

If Pawlenty can pull it off, it will make a compelling argument that taxing & spending is not sustainable, especially in times of an economic downturn.

UltimateBob on December 20, 2008 at 11:46 AM

To whom? Do you really thing the MSM is going to make this argument? Get real. More likely you’ll see sob stories about people who have been thrown out on the street by the big bad guvnah, and he’ll lose reelection and that’s all folks!

fossten on December 20, 2008 at 11:56 AM

@Jim62sch: Sorry, but he isn’t following Sarah Palin on this one.

strictnein on December 20, 2008 at 11:38 AM

Are you saying that’s she not leading, or he’s not following? I’m not a Pawlenty fan (he puts me to sleep) but I’m happy to see any GOP politician making some effort to follow conservative principles.

Jim62sch on December 20, 2008 at 11:59 AM

Dose this mean no more public foot baths at the airport?

budaside on December 20, 2008 at 12:05 PM

@ernesto on December 20, 2008 at 11:37 AM

As a UofM alum, the current university president is an idiot and has spent wastefully without doing much for the university. Brundicks first order of business was remodeling the president’s home. CUNY is one scary system, even Hunter and City College are problematic. Baruch at least gets you good exit options, though less so with the financial market imploding.

IR-MN on December 20, 2008 at 12:14 PM

This is another false positive. If you tax and spend like crazy then when times are tuff then you cut spending. What about not taxing and spending in the first place and putting away money for a rainy day

KBird on December 20, 2008 at 12:17 PM

but without the higher ed leadership necessary to make these things work them money is useless…which may be the case there.

ernesto on December 20, 2008 at 11:37 AM

I’d don’t buy into the argument that better educated people make better choices, one need only look at congress and the hierarchy of most universities to see that higher education in many cases just creates more idiots with impressive sheepskins.

Tim Zank on December 20, 2008 at 12:18 PM

Dose this mean no more public foot baths at the airport?

budaside on December 20, 2008 at 12:05 PM

Are you kidding? It’s Minnesota we’re talking about. There will be plenty of money left in the budget for foot baths and cab passenger (not driver) sensitivity awareness seminars.

Tim Zank on December 20, 2008 at 12:20 PM

Every government at every level is bloated with services and spending that benefit no one but the politicians that initiated them. Then there are usually more employees than actual jobs that need to be done. Gov. Tim is right, but he needs to cut further.

n0doz on December 20, 2008 at 12:28 PM

Are you kidding? It’s Minnesota we’re talking about. There will be plenty of money left in the budget for foot baths and cab passenger (not driver) sensitivity awareness seminars.
Tim Zank on December 20, 2008 at 12:20 PM

Also for spending in schools on Winter Solstice school gatherings which just happen to occur around December 25th.

Bishop on December 20, 2008 at 12:40 PM

Still, I can’t dig on Tpaw too far, he gave me conceal-carry which forced me to buy a very nice High Standard compact .45 yesterday.

Yes honey, I was “forced” to buy the gun; I don’t make the laws, sweetie.

Bishop on December 20, 2008 at 12:42 PM

How dare Pawlenty want to destory more bridges. Does he not understand the why government works is by forcing people to spend less on stuff they like which forces stores to hire less workers which in turn force them to bow down the the holy government for money.

He is doing it all wrong. You HAVE TO force people to have less money to spend on stuff.

BroncosRock on December 20, 2008 at 12:50 PM

Don’t give Pawlenty a pat on the back, Ed. First, during his six years in office, he presided over a budget that went from 25b to near 35b. He almost did nothing to control state spending except vetoing the DFL’s even more insane spending bills. When he did budget cuts, they were to local government aid. And Pawlenty, not enacting any property tax caps, also presided over the largest property tax increase in state history. Now there’s no tax area that’s low in this state. He’s still better than a dem, but let’s be honest about his background.

IR-MN on December 20, 2008 at 11:25 AM

For me, Local Government Aid (LGA) is the embodiment of “spread the wealth around”. It takes peoples money from all over the state, brings it to St. Paul (our state capitol for you who have been processed in government schools like hogs through a slaughterhouse). It is then distributed across the state to those “local governments” who can up with the biggest sob story, make a lethal alliance with some other entity, etc. But, what it means is that “local governments” that can’t make it on their own bleed resources from those “local governments” that can and do support themselves.
It is absolutely the living form of “From each according to their abilities, to each according to their needs”.
In other words, I loathe LGA.
Oh, my…is it that obvious?

Amendment X on December 20, 2008 at 1:00 PM

IR-MN on December 20, 2008 at 12:14 PM

It really depends on what you’re going to the school for. If you’re at Hunter for english…yea maybe you’ll have some trouble when you get out. If you go for chemical engineering thats a slightly different story. Same for City. If you leave City with a mech engineering degree you’ll be as good as the next graduate. But lets not forget CUNY is the 3rd largest system in the whole damn country. Almost a full 500,000 students. I’ll take any progress when you’re talking about a system that large. I mean, look at SUNY…they’re all over the place. Unless you’re at Binghamton or Stony Brook you’re screwed.

Tim Zank on December 20, 2008 at 12:18 PM

Its not about better educated people making better choices. Its about what a functioning higher ed system does for a community. Especially on the community college level, the retraining that many people will need to undergo in this economy is done out of community colleges. Plus having superstar researchers (like michio kaku at CUNY) helps bring in new talent to the neighborhood…which helps grades which makes the place more attractive to others which can revitalize a community. Sure the high minded ivies are echo chambers but one should always support their public university system…they yield dividends in all sorts of ways you may have not considered.

ernesto on December 20, 2008 at 1:02 PM

And BTW, why would Governor Pawlenty do anything with property taxes that are not a state responsibility but local?
Let the local taxes reflect the local needs and responsibility or irresponsibility.

Amendment X on December 20, 2008 at 1:02 PM

It’s always encouraging to see politicians use basic common sense.

ramrocks on December 20, 2008 at 1:16 PM

Amendment X on December 20, 2008 at 1:00 PM

I totally agree with you. I’m just mad because I live in a liberal area, and ever time a bond/school referendum gets on the ballot, it wins. Before Ventura’s property tax reform, property taxes were cheap here. Now less so. I could move, I guess, to a more conservative area.

IR-MN on December 20, 2008 at 1:21 PM

In NY state one of the proposals is to raise college tuition by $620 a year for public schools as a way to close the budget gap. Sounds reasonable right? That means a college kid will give up a few weekend of drinking or work another 80 hours a year (1.5 hour a week) at their minimum wage burger flipping job. Yet read any NY media and you’d think the governor just announced all puppies will be killed in the state.

There is a mentality out there in this country that at no time should any citizen ever be made to go with less stuff from the government. And with the MSM on the same side, the notion of government ever gutting spending and/or services is laughable.

Just remember increasing a program by 5% instead of 10% is considered a cut in the program using liberal speak.

angryed on December 20, 2008 at 1:37 PM

angryed on December 20, 2008 at 1:37 PM

Actually the poorest kids wont even see an increase…you see the Tuition Assistance Program (TAP) covers $5000 a year. With the tuition increase…CUNY tuition still doesn’t even hit $5000 a year. The students who actually need the money wont lose a dime. Only the union is fighting the tuition increase. The Faculty Senate is on board…even the Student Government is on board. Anyone saying otherwise is just full of it.

ernesto on December 20, 2008 at 1:45 PM

I’m with IR-MN, cutting spending will still proposing budgets with huge deficit spending because they lacked fiscal restraint in previous years isn’t something to crow about.

lowandslow on December 20, 2008 at 2:30 PM

If I was King and Emperor of the United States, I would by fiat;

1. Enact Tort Reform
2. Ban labor unions and discard all current contracts
3. Eliminate the War against Drugs
4. Eliminate the USPS
5. the Dept. of Education
6. the BATF, and all other overlapping federal law enforcement agencies except for the FBI
7. the Dept. of Interior, Social Services, Veteran Affairs, Forests, Indian Reserves, the whole lot
8. Mandate that all Health Insurance companies cannot deny coverage but can charge higher rates for pre-existing conditions.
9. The elimination of the FDC, FAA, almost all Governmental Regulatory agencies.
10. Enact a Freedom Parity Act that requires all legislatures, to eliminate two laws for every new one they pass.

So there!

epluribusunum on December 20, 2008 at 2:31 PM

8. Mandate that all Health Insurance companies cannot deny coverage

epluribusunum on December 20, 2008 at 2:31 PM

You had me until this one. This is quite anti-free market.

fossten on December 20, 2008 at 2:52 PM

Property taxes in MN go up as the state struggles with budget cuts. Chisago County is in the outer ring of the twin cities. It costs more in property taxes to live here than almost anywhere else in the north metro. Everytime Governor Pawlenty holds or cuts tax hikes the Democrats in office for this county just add to the property tax bill. When voters have called the county to ask what’s going on, they have been told to move to a place they can afford. Small business owners were at city hall 2 weeks ago to challenge the city on thier proposed tax hike – they said they are near the end of being able to stay in business WITHOUT the new property tax hikes (and Obama hasn’t even had his way with small business yet). I could go on…..but I am too ill at the thought of being from the state that elected Al Franken to the senate.

Sweetness0726 on December 20, 2008 at 3:14 PM

You had me until this one. This is quite anti-free market.

fossten on December 20, 2008 at 2:52 PM

Can we keep at least one single shred of decency and compassion? Just one? Im sorry, but free-market principles dont make it any easier to ignore the fact that someone going bankrupt or dying for lack of health insurance is downright inhuman. Sure make it more expensive if you have a preexisting condition…but dont leave those people with zero options…thats sick.

ernesto on December 20, 2008 at 3:36 PM

Just remember increasing a program by 5% instead of 10% is considered a cut in the program using liberal speak.

angryed on December 20, 2008 at 1:37 PM

That is the money quote.

Tim Zank on December 20, 2008 at 3:38 PM

So Pawlenty’s been part of the problem, and this won’t go far enough to fix it. Do we complain at him for doing it, or do we flood his office with thank-you notes to give him moral and political cover for doing more of it?

Nevicata on December 20, 2008 at 4:17 PM

It’s snowing pretty good here right now. I say we cut off D.O.T. right now. That way none of the pols will be able to get to the Capitol till Spring. If They’re not there they can’t spend, spend and spend some more.

oakpack on December 20, 2008 at 5:53 PM

Sweetness0726 on December 20, 2008 at 3:14 PM

I feel for you. My property taxes went up way too much over the last five years. Pawlenty could’ve approved lower budgets, and either increased LGA (with corresponding property tax caps) or forced the DFL to cut income or sales taxes in exchange for some increases in spending. He did nothing but let the state House GOP implode. If you think Chisago taxes are high (which I can’t believe it, Chisago is a bedroom community), come to Hennepin.

IR-MN on December 20, 2008 at 6:54 PM

Nobody needs to buy that man a clue.

Good job, Governor!

DannoJyd on December 21, 2008 at 9:43 AM