It's a proposal that makes perfect sense: Instead of relying as much on local-goverment aid cuts that will disproportionately affect rural and core urban areas, why wouldn't the state make budget reductions in an area that affects the state more evenly?

That's what Rep. Dan Dorman of Albert Lea is proposing. By cutting the state's homestead tax credit first, the state could make up a significant portion of the amount it had planned to save by cutting LGA, and most importantly, the impact would be spread around based on market value.

The state would still cut LGA, but not as much. In a time of such a budget crisis, it's to be expected that everyone will be hit, and most cities would agree that some cuts in LGA are appropriate. What's unfair about Gov. Tim Pawlenty's proposal is that rural cities like Albert Lea, as well as the urban centers of St. Paul and Minneapolis, are hit the hardest while wealthy suburbs (who, coincidentally, vote heavily Republican) get off the hook. Cutting the homestead tax credit first would change that.

It's clear that Gov. Tim Pawlenty will veto any bill that comes to his desk that increases taxes directly. He prefers to do it in a more roundabout way by cutting LGA and forcing local cities to raise taxes or fees, as well as increasing other fees for state services. Dorman's proposal is feasible because it doesn't raise any tax rates and helps rural cities a little more with their budgets. It's a compromise that we hope is part of the final budget solution.