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Olson calls Senate budget 'honest and balanced'

The Minnesota Senate's proposed budget, in calling for $2 billion in new revenue, presents "an honest and balanced" budget, says Sen. Mary Olson. DFL-Bemidji.

With the state facing a $4.6 billion shortfall in the next biennium, the DFL-controlled Senate last week announced its budget blueprint calling for $2.4 billion in cuts and $2 billion in new but unspecified new revenues.

Reductions would be achieved through 7 percent cuts across the board, including a $973 million hit to early education through 12th grade and a $221 million hit to higher education.

"The proposal really needed to be realistic and really put forth an honest, balanced budget," Olson said last week.

The Bemidji Democrat said the proposal comes after legislative town hall meetings were held across the state, including in Bemidji.

"The overall message I took away was that people just wanted us to be fair and not to target a particular group for unnecessary hardships or to pit one group against the other," she said. "So that's exactly what we tried to do."

Gov. Tim Pawlenty, who is expected to come out shortly with a revised budget, proposed mostly cuts, along with some funding shifts and higher fees. He would also increase funding to K-12, which accounts for about 40 percent of the state budget.

"We came out with a proposal that has more cuts than anything else -- the biggest portion of our balancing of the budget is achieved through cutting -- and those cuts are going to be very difficult to make," Olson said.

The DFL proposal would cut each area and department 7 percent across the board, she said, but does not make specific recommendations. Each department could shift program funding, as long as the total budget is 7 percent less.

"Those are the targets for each department to meet, but as we put budgets together, we're going to look at what makes the most sense," Olson said.

The proposal doesn't say where $2 billion in new revenues will come, but it's something that Pawlenty opposes, given his "no new taxes" stance he's held for six years. But the Senate Taxes Committee chairman has said what direction he's leaning.

"The governor's budget plan included huge property tax increases and one-time solutions that would saddle our kids with debt," said Senate Taxes Chairman Tom Bakk, DFL-Cook. "We're going to explore approaches to revenue in the Taxes Committee and look for assistance in the governor's amended budget.

"The recently released Tax Incidence Study clearly indicated that those with higher incomes in our state aren't paying their fair share of taxes and that the middle-class is getting stuck with a disproportionate burden," says Bakk, a 2010 candidate for governor. "The property taxes and other regressive taxes in the Pawlenty budget are hurting folks who can't afford more pain right now."

But Olson said there is no official Senate DFL position yet.

"I can say in a very straightforward way that ... we haven't had that discussion yet," she said. "We've got a long ways to go before any of those decisions are final."

But if raising taxes on the wealthy is the position the Senate DFL takes, "we're still looking at a 7 percent cut, which is a big cut," Olson said. "Without any additional revenue, then that cut simply doubles if we're actually going to balance the budget and be responsible."

With a 14 or 15 percent cut, "then things become extremely painful," she said. "Those are the options that we have."

The DFL proposal includes education in the across-the-board cuts, and Olson said school superintendents have told her that Pawlenty's education increase wasn't realistic.

They said "it wasn't fair to be giving false hope to teachers or to school districts," Olson said. "The budget proposal that Gov. Pawlenty proposed does not balance the budget. It also eliminates all the adults in my district, and that's a very large number of people, from their health care program."

Pawlenty hasn't "proposed anything that would hold education harmless," she said.

But the Senate DFL position isn't favored by the state's teacher union.

"The proposed cuts are not in the best interest of Minnesota's school children," says Tom Dooher, Education Minnesota president. "If enacted, they would seriously harm the quality of education the state takes pride in providing its students. Parents need to know that under this proposal their kids will get less individual attention and fewer opportunities for learning. The cuts to higher education could also lead to yet more tuition increases at the MnSCU schools and the University of Minnesota."

Federal economic stimulus dollars will help with about $2 billion of the projected $6.4 billion total deficit, but that is onetime funding, Olson said. A third leg that must accompany new revenues and budget cuts is budget reform.

"What I'm really trying to focus on with some of my other freshmen are some reform proposals that we can put together that will try to find different ways to do things without actually eliminating the ability to provide a service," the Bemidji DFLer said.

"If we can find some better ways of doing things that are more efficient, of course that's the ideal solution," she added.

But that will take time, perhaps into the 2010 legislative session.

"We're not going to get all the way there through those kinds of reform proposals ... but there are some we will try to pass this session but we can at least have some things introduced that if nothing else will be a vehicle for discussion over the interim," she said.

Olson, a member of the Senate Judiciary Committee, has held informal meetings to streamline judiciary operations with an intermediary stop before a formal trial, such as a magistrate. She's also looking at other diversionary programs, such as making more use of restorative justice programs.

Olson has a bill which would require first-time juvenile offenders to go through a restorative justice program. "It's not an easy ticket out of a consequence, and actually provides more of a consequence because the person has to sit down with the victim ... and come to some kind of a mediated agreement."

Olson said that "as legislators, we are working very hard within our areas trying to find some reform approaches that are at least worth discussion."