Insight News

Feb 08th

In 2003, Follow the Money

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Last week Tuesday, Gov. Tim Pawlenty released his emergency supplemental budget, calling on the Legislature to take speedy action to wipe out the $356 million budget deficit for the current fiscal year which ends June 30. The plan calls for structural (permanent) reductions of $171 million that would impact state agency operations ($44 million), state agency grants and programs ($77 million) and higher education savings of $50 million. The plan provides for additional “tools” to state agencies and higher education systems to meet the reduction targets. These tools include uses of mandatory salary savings measures such as a shorter workweek to prevent layoffs.

Also proposed is a one-time savings of $297 million, i.e. refinancing transportation projects ($130 million), delaying sales tax refunds on capital equipment ($50 million), with the remaining $117 million coming from a variety of fund balance reductions.
Pawlenty used a first ever “Ethnic Corridor Tour” to take his message about the need to reduce state spending to leaders in African American, American Indian and Chicano-Latino, and Asian communites. The January 10 tour visited business establishments owned by people of color in North Minneapolis, South Minneapolis, and the Midway area of St. Paul.

Representative Keith Ellison, (D-58B) said there are three ways the budget crisis can be fixed: 1) raise taxes 2) cut expenditures or 3) do both. “It looks like were going to have to do both,” he said in a recent interview. “The governor says taxes would be raised in a fair way, in a way that’s not cumbersome to anyone. I’d recommend a 5 percent income tax increase on people who earn over $1 million.” According to Ellison there are approximately 5,400 people in Minnesota who earn over $1 million annually.

"I am concerned that poor people do not get hurt by these budget cuts. Local government aid should not be cut. We need police protection, we need social programs such as domestic abuse programs for women,” said Ellison.

Representative Neva Walker (D-61A) warned that tough decisions are going to be made. To the public, she said: “This is going to be a quick lesson in government 101.”
Walker takes issue with the Republican argument that in desperate financial times such as these, perks cannot be afforded, only the necessities. “How do you define necessities? Mainstream folks don’t know what the true impact will be [on certain populations] if they lower taxes and cut government spending.

The pain will be felt in all areas,” said Walker. “For example, there may be senior citizens on fixed incomes who have paid for their homes, but their property taxes or utilities may be too high. There’s a huge misconception of who’s going to be hurt.

"Folks need to start getting informed and educated about the political processes. This budget crisis is a huge deal. This is an opportunity to get an understanding that if money isn’t allocated to the city or to the counties, then expenses for institutions such as HCMC will fall back on the people,” said Walker citing that the Health & Human Services budget is more than 60 percent of the overall state budget.

Ellison said: “If the Republicans get their agenda through, then people aren’t going to have the services they once had, it’ll be time to think of alternatives. We’ve got to get people to the Capital. Talk to your legislators.”

Walker encouraged people to not let their elected officials get away with saying, “we didn’t know that’s what the people wanted.”

There will be an information and education session on the 2003 budget and how it will impact people at the Minneapolis Urban League January 30 at 6 p.m.

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