House, Senate bills would lessen blow to local aid

Published 7:15 am Tuesday, March 23, 2010

Two bills passed by the Minnesota Legislature Monday afternoon could reduce the sting cities like Austin feel because of state budget cuts.

The Democrat-controlled House and Senate each passed bills that cut more than $300 million from the state’s budget, a step toward tackling a $1 billion deficit. In the process, they swept aside Republican Gov. Tim Pawlenty’s recommendations for the same spending categories, which would have meant more severe cuts to local governments.

The House and Senate plans call for roughly $105 million in cuts to city and county aid this year. By comparison, the governor has called for a roughly $256 million reduction.

For Austin, 2010 losses under the House and Senate plans would come to roughly $408,000, versus nearly $1 million under the governor’s proposal. Either cut would be on top of nearly $900,000 already unalloted by Pawlenty this year.

City financial director Tom Dankert said neither scenario is good for Austin, but he was encouraged to see the Legislature at least trying to lessen the blow.

“It’s good news that the House and Senate have in essence the same plan,” Dankert said. “(But) bottom line, they need to have enough (votes) to override (the governor).”

Pawlenty will consider the Legislature’s budget bills, but he would prefer they make all their cuts at once so he could look at their entire plan, said his spokesman, Brian McClung. The Legislature’s plan is to present roughly $700 million in additional cuts later this spring to address the rest of the current deficit.

However, any solution will be temporary — economists predict a deficit several times as big for the next two-year budget period, which begins in July 2011.

-The Associated Press contributed to this report