Pawlenty firm in opposition to new taxes

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ST. CLOUD, Minn. — Gov. Tim Pawlenty praised Minnesota’s agriculture and mining sectors and reiterated his opposition to tax hikes in a speech Wednesday that some lawmakers said lacked a plan to address the state’s lagging economy.

Delivering his annual State of the State speech, Pawlenty told a St. Cloud Civic Center crowd that “our state is strong even as we are challenged by circumstances.”

Pawlenty asked the Legislature to pass a package of proposals benefiting military veterans, work with him on education reform and further develop Minnesota’s renewable energy industry.

On the economy, Pawlenty said that as policymakers tackle the projected $373 million deficit, they should remember Minnesotans are faced with rising living costs, so should not be subjected to state tax increases.

“The last thing they need is government rummaging around in their pockets looking for more,” the Republican governor said, emphasizing his position by brandishing a red veto pen he called his “taxpayer protection pen.”

One measure he is expected to veto, as he did in 2007, is the transportation finance bill, which Sen. Steve Murphy and others unveiled Tuesday. The Red Wing Democrat panned Pawlenty’s speech, saying the gas tax and other spending mechanisms in the transportation bill will add jobs to the state through construction projects.

“He is trying to gloss over the actual state of the state,” Murphy said, “which shows we’re on the edge of a serious recession.”

As he took his annual speech outside St. Paul for the second time in six years, Pawlenty said the state should support its “cornerstone industries,” including farming and mining.

With one in five Minnesota jobs tied to agriculture, the governor said the state should do what it can to keep farming costs, including fuel and taxes, down.

Rep. Steve Drazkowski, R-Wabasha, applauded the governor’s message on agriculture.

“We can’t continue to burden farmers with overzealous regulation and taxes,” he said. “We’ve got to do what we can to support that economic engine.”

Pawlenty renewed his request that lawmakers approve a plan to boost by tenfold the amount of soybean oil in the state’s diesel fuel.

He spoke optimistically about the future of the state’s Iron Range, now that growing global demand for taconite is spurring job growth and economic development in northeastern Minnesota.

“Our mining sector, after a long history of highs and lows, has also rebounded well,” he said.

House Majority Leader Tony Sertich, DFL-Chisholm, said the region’s future is promising, but Pawlenty so far has not proposed enough state borrowing for infrastructure improvements needed for a key steel plant project.

“If we’re going to make that investment, he’s got to step up to the plate more,” Sertich said.

Pawlenty said the state is relying on a 40-year-old tax system that needs reform. He is creating a 21st Century Tax Reform Commission to study ways to improve the job climate by updating the state’s tax laws, inviting private-sector involvement.

“Minnesota families cannot afford any more tax increases,” Drazkowski said.

Senate Majority Leader Larry Pogemiller, DFL-Minneapolis, said lawmakers already know how best to improve the tax system, including by closing corporate tax loopholes.

“We don’t need to study the issue any longer,” Pogemiller said, though he added that the Legislature will go along if tax committee leaders wish.

As lawmakers begin debating a major transportation funding package that includes gasoline and other tax increases, Pawlenty said he remains “hopeful we can overcome the politics and rhetoric of this debate and pass a bipartisan transportation bill this session.”

Murphy predicted his bill would receive enough support from House Republicans to override a Pawlenty veto.

Pawlenty touted a previously announced proposal to boost business growth and entrepreneurship in rural Minnesota. He also lobbied for a separate plan to attract talented professionals to teaching and to create a training institute for math and science educators.

“They all cost money, and he doesn’t propose how to pay for them,” Sertich said.

Tags: news, pawlenty, taxes