Legislative panel urged to raise taxes during town hall meeting in Bemidji
Pedie Pederson rode his motorized wheelchair from his subsidized apartment in downtown Bemidji to Bemidji State University to testify Friday at a legislative town hall on the state budget.
"I realize that we have a budget crisis and that we do need to cut our budget," Pederson, who lives with cerebral palsy, spoke with difficulty. "We must live within our means. But we also need to realize that you can cut and cut and cut and rip out every program, but that won't solve the problem."
More than 250 people crammed into the American Indian Resource Center's Great Hall on the BSU campus for a legislative listening session on priorities for the state budget. A bipartisan panel of 15 legislators heard from 70 people over two hours on what to do with a potential $7 billion deficit for the next two-year state budget that begins July 1.
In Pederson's case, increased income taxes have to be part of the solution. "Higher taxes is not good, but I'm sorry ... we don't have a choice."
Most of those who testified -- a large majority representing special interests from local governments to associations for the disabled -- told the same story. They provide important services to vulnerable or low-income Minnesotans that can't operate with dramatic cuts.
And, most said, it's time to raise income taxes, cutting across the grain of Republican Gov. Tim Pawlenty's long-standing "no new taxes" promise. Testifiers came from Roseau to International Falls to Park Rapids.
Public participation at the legislative town hearings has been huge -- with some 2,100 people prior to the Bemidji hearing which capped a two-day swing through Minnesota. Next week, similar town halls are planned in the metro area.
"We're getting a lot of feedback -- feedback about what people value as a priority," House Speaker Margaret Anderson Kelliher, DFL-Minneapolis, said in an interview. "We're hearing a lot about education, both K-12 and higher ed, a ton about health care and how people are quite concerned about the governor's proposal."
Kelliher said people have been articulate in conveying their needs. "They want a budget that they feel is equitable and fair. It's pretty clear that people are also pretty interested in making sure there is a balanced approach in solving this very large budget deficit."
And balance will come with spending cuts coupled with tax increases, admits Kelliher, setting up the battlefront between the DFL-controlled Legislature and GOP Gov. Pawlenty.
"Everyone understands there's going to be cuts," she said. "I think it's a question of fairness of cuts. ... The governor includes significant revenue in his budget through an appropriation bond, so I think he's admitted there needs to be some for of revenue."
Pawlenty proposes slight increases in K-12 spending, adds $250 million to the budget reserve and would cut corporate taxes $287 million, Eric Nauman, a Senate fiscal analyst, told the group in a budget briefing. The largest cut, at $1.45 billion, is in health and human services spending.
K-12 would see $1.3 billion in state payments delayed to the next biennium, and Local Government Aid to cities would be cut $468 million and higher education cut $313 million.
With the hearing on the BSU campus, many of those who testified were faculty, staff or students.
Higher education is important to the future of the state, said Andrew Spaeth, a BSU student. "It's critical both for the economic quality of our state and the social well-being of the state."
For Minnesota to be viable, "we have to have a highly educated workforce," he said. BSU, which faces $2.5 million in cuts under the governor's budget, is the community's third-largest employer.
Strong higher education "can help build Minnesota's economy," said Becky Bowen, another BSU student, adding that 80 percent of the graduates in the Minnesota State Colleges and Universities system stay in Minnesota becoming tomorrow's educators and nurses.
"Our students understand in difficult economic times that sacrifices must be made," Bowen said. "However, a continuing trend of declining investments in public higher education will not help rebuild Minnesota's economy and will not help us rebound."
Christopher Brown, president of the Inter-Faculty Organization, the BSU's faculty union, said its members have accepted a salary freeze as their part of a budget solution.
"There is no one fix to this," he said. "We've offered a pay freeze right at the beginning. That's not going to solve it, even. There obviously has to be something on the revenue side that is not all tuition on the students. Perhaps some sort of tax adjustment may have to be made."
Dan Gartrell, an early childhood professor at BSU, mixed both higher ed with human services cuts, noting that Pawlenty's budget makes cuts in child care subsidies. That program is used on campus by single parents attending college.
"Cuts to child care assistance for low-income users are going to hit the very population who needs most this very direct support in order to continue education at Bemidji State," Gartrell said. "It's the lowest income folks in our state that we have to protect. We need more taxes, more revenue, and we need to support programs like child care so our youngest folks can thrive in the future."
A strong case was also made for the judicial branch, with two judges, the 9th Judicial District chief public defender and several others testifying about the 5- to 10-percent cuts under the Pawlenty budget.
The statewide budget for public defenders is 0.04 of the $36.7 billion state budget yet public defenders represent 85 to 90 percent of the people who appear in court, said Kristine Kolar, the chief public defender.
There have been 53 public defenders laid off in the past year, she said, and another 50 lawyers may have to go under the budget proposal. "That's 140,000 hours of public defender services lost based on the budget cuts."
"Our budget is almost entirely personnel," said Beltrami County District Judge Paul Benshoof. "With cuts, we will lose people. If we lose people, we will not be able to process cases. If we will not be able to process cases, we will not be able to do justice. That's the bottom line."
The judicial branch is a co-equal branch of government, he said, yet it represents 2 percent of the state budget. The system last year processed more than 2 million cases in Minnesota, including some 11,000 in Beltrami County.
Beltrami County District Judge Shari Schluchter spoke in support of DWI court, an alternative justice program that would have funding cut under the Pawlenty budget.
There are six felony repeat DWI offenders now in the court who otherwise would be sitting in state prison, costing the state nearly $400,000 with typical 28-month sentences, she said.
"If the governor's proposal of a 5 percent to the judiciary (is accepted), we most likely will see the closing of the problem-solving courts throughout the state," Schluchter said.
People spoke against the closing of the Perpich High School for the Arts, against cuts to waivered services for the disabled, against the elimination of the State Arts Board and against lowered reimbursements to hospitals and long-term care facilities.
Others called for the state to do zero-based budgeting and start from scratch, funding the services mandated by the State Constitution, and to be careful about raising taxes and the affect on businesses already on the edge.
Marilyn Heltzer of Bemidji, who billed herself as a community volunteer, said she'd received e-mails from a host of organizations to attend Friday's forum and testify -- public schools, libraries, the judiciary system, Minnesota counties, the homeless and the arts.
"There are many of us -- citizens and taxpayers -- who recognize that this is not us versus them, not programs pitted against one another, not citizens versus the Legislature, not Democrats versus Republicans," she said. "We're all in this together."
All understand that programs will be cut, Heltzer said. "But I hope you also understand that many of us recognize that taxes must be increased, that an increase in taxes is absolutely necessary."
Speaker Kelliher said Pawlenty will need to do his budget over to account for federal economic stimulus funding that will help lower the projected deficit. Once that is done, and the March 3 budget forecast is digested, legislative leaders will set budget targets for their own budget.
"I believe right around the Easter break of the Legislature, we will have a legislative budget proposal ready to move the process and move forward with conversations with the governor," Kelliher said.