GOP says DFL exaggerating effect of cuts

By Mark Fischenich

The dispute that’s been going on for months at the state Capitol came to Mankato Tuesday with dueling press conferences by Republican and Democratic lawmakers.

Within the political posturing and broad statements that will likely return in next year’s campaign season was the dispute that really matters to Minnesotans.

It matters if you or someone you know works or receives care in a nursing home or a hospital and if you or someone you know has health insurance.

The disagreement matters if you or someone you know works for, or receives services from, or pays property taxes to support, a city or county.

It matters if you or someone you know is employed by or attends a state university or college.

For all of you and more, the next couple of years are going to bring some ugly news, according to Democrats.

“These are difficult choices and we shouldn’t make light of them and we shouldn’t play partisan politics with them,” state Rep. Terry Morrow said of the cuts that are coming. “Because these are real people. Cuts cost. .... Cuts cost. You don’t get something for nothing.”

Republicans discounted the Democratic warnings, calling the DFL press conferences held in Mankato and around the state a “misery tour.” And the GOP lawmakers predicted the budget reductions to be made in coming months and years by Republican Gov. Tim Pawlenty will be sometimes painful but not nearly as decimating as DFLers suggest.

“This will be good for Republicans because what people are going to squawk about for the next six months isn’t going to come to fruition,” said Sen. Dick Day, R-Owatonna.

But Republicans, like their Democratic colleagues, suggested that the outcome of the legislative session that ended at midnight Monday is going to have a crucial impact on many Minnesotans.

It will have an impact if you or someone you know has a job, if you or someone you know runs a business and if you or someone you know drinks alcohol. That’s because Pawlenty blocked DFL attempts to raise taxes to erase about one-sixth of a $6.4 billion state deficit, a step that will leave the governor with the power and obligation to unilaterally cut spending to make up the difference.

“You cannot keep taxing the business owners and the profitable ones because I guarantee you they’ll move out of town,” said Sen. Julie Rosen, R-Fairmont.

They’ll take the jobs they provide with them, and they’ll do it at a time when Minnesotans are struggling through a deep recession, other Republicans said.

“We have to have good-paying jobs and we have to have a lot of them,” according to Rep. Bob Gunther, R-Fairmont, who said the top refrain he heard from people in his district was this: “What we need most, Gunther, is jobs, jobs, jobs.”

On that point, it was the Democrats accusing the Republicans of overstating the problem. The tax bill passed by the DFL-dominated Legislature raised income taxes on households earning more than $250,000, which Pawlenty immediately pledged to veto.

The impact on a family of four with a $300,000 income would be a $109-a-year tax increase, according to House Speaker Margaret Anderson Kelliher, the equivalent financial hit of eliminating one pizza a month.

Kelliher asked that the tax increases of more than $1 billion be balanced against the potential loss of certain hospitals and nursing homes on the financial brink, against the threat of rising class sizes, against steep tuition hikes at public universities and against the medical problems that come with the loss of government-funded health care for “the poorest of the poor and the sickest of the sick.”

Fixing the budget shortfall solely through spending cuts will have a real impact on jobs as well, according to Kelliher, who talked of “thousands of health care jobs and other (public sector) jobs hanging in the balance.”

Democrats cited projections of the impact of the coming budget cuts, including tuition increases at state colleges that could reach 15 percent, cuts in payments to hospitals that could top $4.5 million for Mankato’s Immanuel St. Joseph’s Hospital and cuts in state aid to the city of Mankato that may near $3.4 million over the next two years.

In reality, many of the details of Pawlenty’s cuts won’t be known until he announces specific cuts in the weeks ahead.

But Jerry Crest, chief administrative officer at ISJ, said the broad impact isn’t hard to recognize — lost revenue and more uninsured patients who can’t pay and whose costs will need to be passed on to paying patients and insurance companies.

“That’s our only way to stay in business,” Crest said.

It’s a similar story for cities, which will need to reduce services and attempt to make up some of the lost revenue from property taxes, according to Mankato City Administrator Pat Hentges.

“When you start looking at the governor’s cuts, upward of $450 million (for cities statewide), that’s a pretty tough number for us to manage,” Hentges said.

Day had advice for cities and other organizations facing reductions in assistance from the state.

“Get a life and set a budget,” Day said. “You’re going to have to be tough. City council people are going to have to be tough, just like state people.”

Democrats countered that even Pawlenty didn’t really want to cut as deeply as he will now have to, pointing to his earlier proposal to borrow $1 billion to reduce the scope of spending reductions.

“He wants to spend by a credit card and we want to spend by a permanent revenue stream,” said Sen. Kathy Sheran, DFL-Mankato, who suggested much of the rest of the debate was political window-dressing. “That’s all that’s left. It’s down to that.”

Pawlenty didn’t do his traditional post-session media fly-around to cities around the state, but he held a Capitol press conference. And he had his own brief description of why the session ended the way it did.

“You don’t raise taxes in the worst recession in 60 years,” he said.