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As Pawlenty fumes, DFL turns to the deficit

ST. PAUL -- Now that the big legislative issue is settled, attention turns to the really big issue.

After lawmakers Monday overrode a transportation funding bill veto, state officials prepared for what will be even a more difficult task: how to fix a budget deficit that some say could top $1 billion.

And if Gov. Tim Pawlenty's mood Tuesday was any indication, the next three months could be pretty contentious.

"The session isn't even a month old, and they (Democrats) have passed two major tax bills," Pawlenty said soon after returning from leading a National Governors Association meeting in Washington, D.C.

The Republican governor was critical of Democrats, who control the House and Senate, for first passing a sales tax increase to fund outdoors and arts programs, and on Monday overriding his veto of the state's largest-ever tax increase to fund transportation.

"The hard-working families of Minnesota are going to say 'enough,'" he added.

Pawlenty said only a couple of hundred of about 3,000 calls his office has received favored the transportation funding bill, which raises gasoline taxes, Twin Cities sales taxes and motor vehicle registration fees.

The governor talked about lowering some taxes but was not specific.

Pawlenty said he did not know how bad blood over the transportation bill will affect the rest of the session.

However, he did have one prediction, on Thursday's state budget report: "It is going to be bad."

Filling the growing deficit is lawmakers' next major task.

"I have no idea how we are going to resolve this," Senate Majority Leader Larry Pogemiller, DFL-Minneapolis, told 200 Duluth residents gathered in St. Paul for Duluth-St. Louis County Days at the Capitol.

Ideas will be needed soon. On Thursday, Finance Department officials release a report about how the slumping economy will affect the state budget.

When they released their last report in November, economists predicted the current two-year budget would face a $373 million deficit. Now it is generally is accepted that the deficit could grow to double or triple that. Pawlenty administration officials are tight-lipped about the exact number.

"I hear people are going to be real happy if we end up with something less than $1 billion," Sen. Bill Ingebrigtsen, R-Alexandria, told his colleagues during the transportation bill debate.

Democrats who control the Legislature downplayed the need for tax increases before the legislative session began two weeks ago, but now House Speaker Margaret Anderson Kelliher, DFL-Minneapolis, says she will not rule out anything.

However, Pogemiller appeared to rule out tax increases in his talk at the St. Louis County event. Going into a recession, as economists say is happening, "we absolutely don't want to burden families," the leader said.

Instead, spending must be reduced, he added.

"We are going to have to make a lot of budget cuts," he said.

House Majority Leader Tony Sertich, DFL-Chisholm, said the size of the deficit will affect how lawmakers attack the problem.

Don Davis
Don Davis has been the Forum Communications Minnesota Capitol Bureau chief since 2001, covering state government and politics for two dozen newspapers in the state. Don also blogs at Capital Chatter on Areavoices.