Tuesday, January 27, 2009

State budget discussed, federal government stimulus package

Yesterday at the Capitol

State leaders provide views on Minnesota Public Radio
Speaker Margaret Anderson-Kelliher, DFL-Minneapolis, was on Minnesota Public Radio (MPR) yesterday speaking about the state's budget situation and reacting to Gov. Pawlenty's proposed corporate tax cuts. Kelliher said the state's focus should be on getting out of the budget deficit, not digging the state further into debt. Kelliher said that tax cuts will not solve the immediate problem. Speaker Kelliher also said that the state is not on the right path for economic development. She said one of the things the state needs to do is make strategic developments in higher education. Kelliher said that she would like higher ed and K-12 to tell lawmakers what their needs are and what it's going to take to meet their goals. The state may not be able to help this session, but would like to know what it will take to get there.

The Speaker also said we need to be respectful of the process between management and bargaining units when it comes to state employee salaries. In relation to a federal economic stimulus package, Kelliher said there is a team of Minnesotans in Washington D.C. analyzing the U.S. House and Senate packages.

Later in the day, Gov. Tim Pawlenty was also on MPR to discuss his budget recommendations which will be announced today at 1:00 p.m. Pawlenty did say his proposal will likely need to change because the economy has continued to deteriorate and is likely to get worse with the Feb. economic forecast. He said he is also expecting to get more federal dollars in the economic stimulus package than his budget accounts for so his budget may have to be adjusted. The governor said the state needs to tighten its belt just like everyone else and said he does not feel its a good idea to raise taxes in this type of economic environment. In regards to Pawlenty's proposal to cut corporate taxes, the governor said it's strategically important. He said Minnesota has to strategically reposition itself to be competitive in the future and attract businesses. The governor said programs, such as health care are growing so fast that they need to be slowed down in order to sustain them. He said Minnesota is a high-spending, high-tax state. He said at some point Minnesota needs to learn to live within its means.

A student from the University of Minnesota called in and asked about the governor's proposed tuition cap. Gov. Pawlenty said that he believes a tuition cap is a good idea and will force systems to manage the goal of keeping tuition increases reasonable. A tuition cap will keep budget challenges from being balanced on the backs of students. He said he left the cap open-ended, but would like it to be modest and close to the rate of inflation. Pawlenty did say he hopes higher education will implement a salary freeze and stop trying to do everything everywhere, but rather prioritize.

Markup of the U.S. Senate's Economic Recovery Supplemental Today
The U.S. Senate Appropriations Committee yesterday released a statement of highlights from the proposed Senate Bill to stimulate the economy.

See http://appropriations.senate.gov/ for details.

Like the House Bill, the Senate proposal appears to include $39 billion
to states to enable them to sustain support for public higher and K-12
education. No details on the plan for allocating these resources are

The Senate also proposes funding for repairs and renovations in higher
education, but the amount specified is $3.5 billion, rather than $6.0
billion in the House bill. No information on procedures for allocating
capital grants is provided.

Today at the Capitol
Please note the time change for Gov. Tim Pawlenty's budget recommendation. The Governor will announce his 2010-2011 budget today at 1:00 p.m. at the Dept. of Revenue.

Legislative schedules are available for the House and Senate.

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