Senate DFL’s spending plan arrives

04/21/2005

Patricia Lopez and Dane Smith, Star Tribune
April 21, 2005


Senate DFLers released a budget plan on Wednesday that they said would spend about $1 billion more than Gov. Tim Pawlenty proposes, with more than 80 percent of the additional money going to education, but did not say how they would pay for it.

The plan for the 2006-07 budget period does include $900 million of “potential tax increases,” said Senate Majority Leader Dean Johnson, DFL-Willmar, but specific tax proposals will be worked out in the Senate Taxes Committee, with a plan to be developed by early May.

What the plan would not rely on, Johnson said, are property tax increases, state budget reserves, shifts or other budgeting “gimmicks.” Some tax options previously discussed have included a sales tax on clothing, possible increases in cigarette and liquor taxes and an income tax surcharge or a rollback of previous rate cuts in the upper bracket.

But when questioned about those options on Wednesday, Johnson looked upward and said, “my lips are sealed like a cardinal in the conclave.”

That opened the door for Gov. Tim Pawlenty to challenge even the Senate’s most basic numbers, saying that its proposed new spending is closer to $3 billion over the current budget and $1.4 billion more than what he had proposed—all without a financing plan.

“The DFL is obviously going to increase taxes. They should at least have the courtesy to tell us whose pockets they are going to pick,” he said.

GOP legislative leaders also scoffed at the lack of detail in the Senate plan, which comes about a month from the Legislature’s scheduled adjournment deadline.

“This is not the time for political cuteness,” said Senate Minority Leader Dick Day, R-Owatonna. “Why is the majority leader having a press conference if his lips are sealed about which taxes he’s going to raise?”

House Speaker Steve Sviggum, R-Kenyon, called the plan “laughable” and “an absolute sham” that could increase tax burdens by as much as $1,500 for a family of four.

Johnson, however, said the plan puts a priority on education, health care and other needed spending that would amount to no more than $1 a day for adult Minnesotans.

Pawlenty’s previous budget-balancing, he contended, had imposed $2.5 billion in property tax increases, fee and tuition increases and surcharges, despite the governor’s claim not to have raised taxes.

DFLers presented only the sketchiest of details about their plan. They provided a single page with 11 basic budget functions and an estimate of how much more or less Senate DFLers intended to spend on each one, compared with how much would be spent under current laws and formulas for programs. Under those current laws and formulas, the state faces a projected $466 million shortfall for the 2006-07 budget period, which runs from this July through June 2007.

The list showed about $800 million more for early childhood education and K-12 education, and Johnson said that maintaining Minnesota’s “world-class education system” will be the Senate’s highest priority. Only three of the 11 categories showed decreases. They were: “taxes, aids and credits,"additional state agency cuts” and “transportation.”

The figures add up to about $1 billion more in spending, but because the Senate DFL plan would adopt some revenue offsets proposed by Pawlenty, their net new spending is $899 million, Johnson said.

Senate Taxes Chairman Larry Pogemiller, DFL-Minneapolis, said he will start hearing revenue-raising proposals today, beginning with an expert hired by Senate DFLers to testify on corporate tax avoidance. Pogemiller has said that tightening on such avoidance could help the state reclaim up to $200 million in tax revenues from large corporations that have enjoyed years of tax advantages.