Governor Pawlenty plans to cut aid to local government, higher education, human services and other programs to make up the state’s short term deficit. Pawlenty used his emergency powers to drain the state’s reserve funds of $155 million and cut $271 million in spending to eliminate the short-term budget deficit of $426 million. The plan includes $110 million in cuts for cities and counties but spares smaller counties and cities with populations of one thousand people or less. Pawlenty said he tried to spare any one group of major pain.
“The deficit for the current biennium has to be resolved. Unlike the federal government, the state of Minnesota cannot deficit spend. We cannot print monopoly money in the basement. The books have to balance. That’s a constitutional requirement. When any deficit opens up in Minnesota’s finances, it needs to be addressed promptly and directly and aggressively and that’s what these unallotments do.”
Pawlenty’s plan also cuts $73 million in Human Services spending, $40 million allocated to the University of Minnesota and the Minnesota State Colleges and Universities system. This will be the first of many tough budget decisions for Pawlenty and the Legislature. Finance officials expect the short term deficit to grow. The state also faces a $4.8 billion dollar deficit in the two year budget that starts on July first.
DFL Senate Majority Leader Larry Pogemiller issued a statement saying:
“We thought that across-the-board cuts would be a fair solution. The governor’s cuts fall harder on cities and counties across the state and could hurt police and fire protection. We look forward to working with the governor to find the best possible solution to fixing this historic deficit.”
St. Paul Mayor Chris Coleman issued a news release after the cuts. Here’s part of it:
Today’s cuts cannot be a sign of what’s to come for cities as the budget process moves forward. Saint Paul has absorbed more than $121 million in cuts since 2003, and we’ve responded by making tough choices, restructuring departments, modernizing service delivery, and changing the way our City does business. We have been able to do all of this while making new investments in critical public safety and foreclosure prevention initiatives. Any further cuts in local aid will erase all of this progress and diminish the quality of services in a time when our residents need them the most.”
The City of Saint Paul has taken aggressive action to address continuing revenue cuts. In recent years the Mayor and City Council have worked to reduce costs by merging departments, conducting cost saving efficiency audits, and restructuring services to provide residents better service at a better price.
In response to the State’s announcement, the Mayor has asked all departments in the City to begin plans for a 20 percent budget reduction, and has placed new spending in the 2009 budget into contingency until State decisions are made on Local Government Aid.