3 parties must agree on way to find $1.95 billion

ST. PAUL -- When Minnesota's state lawmakers enjoyed a $1.5 billion budget surplus, they couldn't agree on what to do with it.

Only the threat of a state government shutdown forced them to pass a bitterly contested budget deal in the last hours of a special legislative session in June 2001.

But those days are gone.

The 2002 Legislature convenes Tuesday and faces a projected $1.95 billion shortfall.

Healing that gaping fiscal wound during this election year is the Legislature's biggest job. But at the Capitol, where a Republican-controlled House of Representatives clashes with a Senate run by Democrats and both grate against an Independence Party governor, the cure may be worse than the disease.

"It's going to be worse than it was last year,'' said Rep. Mike Jaros, DFL-Duluth. "We had difficulty getting anything done when we had a surplus.''

On the chopping block is state money for cities, counties, school systems, nonprofit social service agencies, job creation and crime prevention.

"We can't even meet the basic needs of our neediest citizens now,'' said Rep. Dale Swapinski, DFL-Duluth.

But Republicans are unlikely to yield on income and property tax relief they've secured over the past two years.

Many DFL lawmakers have already conceded it will be tougher to pass any bills in the House this session because they lack the votes.

During a discussion with Swapinski about sponsoring a bill that would add $11.5 million in state money to help build shelters for the homeless, Rep. Greg Gray, DFL-Minneapolis threw his hands in the air.

"In Minnesota, not having shelter is life-threatening,'' Gray said. But the budget shortfall and the Republican position on taxes exacerbate the problem, he said. "We still have the needs, but we don't have the money. It's the most frustrating thing. The bottom line -- we are just going to get outvoted on all of it anyhow.''

On the Senate side, Republicans feel the same frustrations. They have their own ideas for fixing the budget but those won't go anywhere, said Senate Minority Leader Dick Day, R-Owatonna.

Even so, Republicans still think state government remains too fat and much of the deficit could be made up by not filling state job vacancies or by siphoning cash from tobacco trust funds set up for health care and education, he said.

Day and others said they believe the economy is on an upswing and the budget shortfall will improve with the state's next financial forecast in February.

"I'm a little more optimistic,'' Day said. "Our plan doesn't cut cities, counties or school districts.'' He said reducing the size of state government is something Republicans can stomach because they don't believe in big government anyway.

Party rhetoric will be cranked up this year too, because a number of lawmakers are making bids for the governor's office.

"The first thing we have to deal with is just a whole bunch of people running for higher office,'' Day said. "But that doesn't really solve the budget.''

So far Speaker of the House Tim Pawlenty, R-Eagan, and Sen. Becky Lourey, DFL-Kerrick, have announced they are running for governor.

Senate Majority Leader Roger Moe, DFL-Erskine, is also considered a potential candidate for the governor's office, Day said.

Between the Democrats and the Republicans is Gov. Jesse Ventura's budget-fixing plan. It looks to cut state aid to cities and counties while adding a variety of new sales taxes. Some of the things taxed under his plan: newspapers, magazines, clothing and attorney fees.

But the Ventura plan isn't cast in stone, said Paul Moore, his spokesman.

"If people have better ideas, let's have them,'' he said.

Ventura has hinted at running again but won't say for sure if he's running until the budget issue is resolved, Moore said.

"The governor doesn't want a re-election campaign to detract from the real job they have to do,'' Moore said.

Also hovering over lawmakers' heads is Ventura's executive power under state law to use state money to balance the budget. Ventura has threatened that action if the Legislature doesn't move quickly enough.

"It provides a big incentive for the parties to be partners,'' Pawlenty said.

Under state law, the session must end by May 20 this year. Those seeking election will want as much time as possible to campaign, especially if they have new areas to campaign in because of redistricting, said Sen. Bob Lessard, I-International Falls.

"My opinion -- people want to go home,'' said Lessard, who has served in the Senate since 1976.

And budget deficits often pull lawmakers together more than surpluses, he said.

"You would think that when there's a surplus we would get along better. Logic would dictate that, but a deficit kind of forces the parties to get along,'' he said.

He predicts a quick session with fast action.

Lourey said the best thing to move the Legislature forward is input from state residents.

"If we don't put things on the table and push them, they won't prevail,'' Lourey said.

Senate Democrats will guard social service programs and education, she said. Democrats would also be careful to protect state money that draws matching federal cash.

And while she doesn't agree with many of Ventura's plans, she does agree with his premise that a budget-balancing bill needs to be passed quickly. Each week, the state falls an estimated $3 million further behind, she said.

"The fact is we need to work fast,'' she said. "We are honed and ready and will go in with the energy to make this come out for the good of the state.''

SCOTT THISTLE covers the Minnesota Legislature. He can be reached weekdays in St. Paul at (651) 222-1265 or e-mail sthistle@duluthnews.com.