Pioneer Editorial: Another budget impasse?
Déjà vu. State lawmakers and the governor are at the same point they were a year ago -- needing to fill nearly a $3 billion budget hole and Gov. Tim Pawlenty has just vetoed the bill to pay for it because it included increased revenues (taxes).
Only this time, he can't just unallot everything since the Minnesota Supreme Court said last week that it was illegal when it did it last year.
Gov. Pawlenty, in his veto letter, notes "it's nonsensical to increase taxes on job providers merely weeks after I signed a bill to provide tax incentives for Minnesota businesses to grow jobs. ... The DFL proposal to add fourth tier income bracket at a rate of 9.1 percent would give Minnesota the fifth-highest income tax rate in the country."
The governor, however, does not offer a solution other than he looks forward to "an appropriate budget solution that does not raise taxes on Minnesotans and significantly reduces the budget deficit in this budget cycle and the next one."
With a projected $5.4 billion deficit in the next biennium, are we to believe that the governor will accept no less than $8 billion cut from state government? That would create a severe cut in services and prompt double-digit property tax increases to make up the difference.
In a response from Senate Majority Leader Larry Pogemiller and House Speaker Margaret Anderson Kelliher, it is noted that the Legislature has voted down the Pawlenty plan, to solve a situation he created by approving spending bills but not the bill to fund them. And the Supreme Court said what he did on his own was illegal. "The state now stands poised on a fiscal precipice of your making," they said. "Any additional court action could plunge the state into insolvency and wreak long-term havoc on the state's bond and credit ratings."
So there you have it. A standoff.
With only scant days left in the session and a budget that must be balanced, any real solution will contain some form of new revenues. Local governments, including schools, have been suffering while the state continues to pass its funding obligations down to them. With a call for "limited government," how much do you limit? Shutting down all of state government would hardly make a dent in the deficit. Closing schools and nursing homes would.
But is that what we want to do? We think not. Please work to find a solution. A Republican governor 30 years ago solved his problem with a 10 percent income tax surcharge that blinked off when the budget balanced. What's so wrong with asking the wealthiest Minnesotans to pay a fairer share of income taxes?