Legislators discuss deficit

Published 1:11 pm Saturday, April 18, 2009

The state’s $6.4 billion budget deficit was the 800-pound gorilla at Friday’s Austin Area Chamber of Commerce legislative luncheon.

Every topic discussed was related to the state budget deficit, which, like a giant gorilla, no one could ignore.

State Reps. Jeanne Poppe and Robin Brown, both DFLers, and Steve Sviggum, the former Kenyon legislator who is commissioner of the Minnesota Department of Labor and Industry, fielded questions for an hour at the Austin Eagles Club.

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Sviggum, a 30-year veteran House member and former House minority leader who serves in Gov. Tim Pawlenty’s cabinet, took the role of the governor’s surrogate and defended Pawlenty on state budget issues.

The 2009 legislative session has only four weeks remaining until the May 18 deadline and solving the state budget crisis is tops on everyone’s agenda.

Sviggum attempted to separate the actual state budget figure of $6.4 billion from the revised $4.6 billion figure when the Obama Administration’s federal economic stimulus package monies to the state were subtracted.

Both figures were mentioned by the luncheon guests.

The first question inquired about the governor’s proposed Local Government Aid (LGA) cuts to help balance the state budget.

“I don’t know if you’re going to be able to solve a $4.6 billion budget deficit without cutting inter-governmental revenues,” Sviggum said.

Poppe pointed out the deficit was so huge, “Everything has to be on the table for consideration.”

Brown said, “I lost my crystal ball a long time ago,” and could not predict the future of LGA.

On a House subcommittee’s proposal that county governments be allowed to levy a one-half cent sales tax of their own for local government expenses, Brown gave it her conditional support, while Poppe expressed uncertainty.

Sviggum said local governments should not have to come to the legislature and “beg” for approval of local revenue issues that could be decided by voters in those jurisdictions.

Health and human services and education squared off briefly at Friday’s luncheon.

Sviggum said the expected 22 percent in spending on health and human services in the state threatens to “eat us up in time” as spending grows.

While the governor has proposed a 2.2 percent increase in education funding; the House wants it to remain “as is;” and the Senate proposed a 3.2 percent decrease in funding.

Brown warned the debate over curbing health and human services spending and cutting education funding only points to what lies ahead. “Each of us will be sacrificing something,” she said.

And Sviggum reminded all, “There is a consequence to every choice you make.”

Wind energy tax revenues

Poppe, a third-term House member from District 27B, and Brown, a second-term House member from District 27A, had to return to the state capitol, where their own pieces of legislation regarding wind energy tax production revenues.

There has been a strong push this legislative session to restore the original formula for their distribution to include school districts without reducing the districts’ education funding.

Poppe took time to recap where the proposed legislation stands at this time.

“Last Tuesday, Rep. Brown and I met with House Speaker Anderson-Kelliher, tax chair Ann Lenczewski, K-12 finance chair Mindi Greiling, and Majority leader Tony Sertich to discuss the topic,” she said. “It was an opportunity to get everyone on the same page regarding what exactly is the wind production tax and why it is a matter in K-12 financing.”

According to Poppe, “We had a non-partisan House researcher who understands the K-12 financing stream in attendance to explain what happened in 2007 which ended up removing the additional dollars from school revenue stream.”

Poppe and Brown had a follow-up meeting with the Tax chairman to see if there is anything that can be done this year to remedy the situation.

“The problem is complicated greatly by the $6.4 billion budget shortfall,” Poppe said, “so it is difficult to increase payments to some schools at a time when we are likely to cut education budget for all schools.”

“And,” the legislator added, “Our local schools aren’t the greatest beneficiaries of this wind production money; schools in western Minnesota would gain even more money.”

Grand Meadow Superintendent Joe Brown (Robin Brown’s husband) and Randy Gronseth, Hayfield, have testified during the 2009 legislative session. They want the school districts’ share of the wind energy revenues to be returned to the districts without penalty.

Poppe and Brown have to weigh all the input they are receiving on the issue.

“Another concern is once there is the opportunity to gain more money because of this unique circumstance it becomes a disparity issue — some get and some don’t and where/when do you draw the line to say all should contribute to the common fund to be distributed to the entire state,” Poppe said.

Candidly, Poppe said sharing with school districts may not have been a part of the original formula for sharing wind energy revenues.

“I tell you this, because the outcome — if we get anything — is not likely to be the way it was anticipated to be four years ago before the change,” she said. “But we are trying to work it out to see if we can get something.”

Brown said she and Poppe “hung tough” and got the meeting — as well as a hearing for their legislative proposals — with House leadership.

“They are supportive at this point and want to hear both our bills,” Brown said.

State Sens. Dan Sparks and Dave Senjem were unable to attend due to commitments at the state capitol Friday.