Union has budget ideas of its own
ST. PAUL -- Gov. Tim Pawlenty would not need to cut budgets so deeply if he would listen to a state union's ideas, the organization's executive director says.
Jim Monroe of the Minnesota Association of Professional Employees said that his staff is looking into ways the state can save money. Although the effort is not done, the MAPE leader said, it is producing good prospects. MAPE has given the Pawlenty administration its ideas, but has heard little back.
For instance, MAPE found that the state may employ about 400 too many supervisors.
The state requires some organizations that receive grants to have no more than 15 percent supervisors on their payrolls. Applying the same criteria to state government could save $55 million, Monroe said.
A second area of potential savings could come from lowering the number of private contractors that work for the state, Monroe added. In the electrical inspection area alone, MAPE figures the state could save $3.4 million by using state employees.
In his Tuesday announcement of budget cuts and delays in state payments, which total $2.7 billion, Pawlenty said state workers would be laid off, but he had no idea how many. Those layoffs are expensive, Monroe said, costing the state health insurance due laid off workers and paying unemployment benefits.
"They are talking more money" laying off people than keeping them on the payroll, Monroe added, especially if they could take over duties now handled by private companies.
Budget cuts and payment delays, especially to school districts, in Pawlenty's plan were needed because the Republican governor and Democrats who control the Legislature did not agree on an overall budget before lawmakers adjourned for the year May 18. Pawlenty decided to take action on his own rather than all a special legislative session.
Failure to find a budget deal means Legislature-passed bills spent $2.7 billion more than available revenue.
One part of Pawlenty's unallotment plan is up to Wisconsin's good will.
The governor's plan includes $106 million, to be gained by Wisconsin speeding up payments to Minnesota. Residents who live in one of the states and work in the other can pay taxes in their home state under a so-called reciprocity agreement, with the state where the person works being reimbursed by the person's home state.
Many more Wisconsin residents work in Minnesota, so Wisconsin must pay millions every year. The trouble is, Pawlenty said, Wisconsin's payments to Minnesota are delayed 17 months. His administration estimates that Minnesota would gain $106 million in the next two years if Wisconsin paid on time.
However, Wisconsin faces an even bigger budget deficit than Minnesota, so Gov. Jim Doyle -- a Pawlenty buddy -- may not want to speed up payments. Doyle is just learning about Pawlenty's request, despite the fact that the two talked earlier this week.
Oftentimes, politicians are accused of not feeling pain they cause.
That is not the cause with unallotment. Pawlenty wants to get rid of a political contribution refund to save the state $10.4 million.
The refund would be eliminated for the next two years. About 90,000 refunds are made each year to taxpayers who donate to political campaigns, then file for a refund.
Cuts heavier in '11
Pawlenty said he tried to make more cuts in the second year of the two-year budget so people affected would have more time to react.
For cities and counties, that means two-thirds of the $300 million cut comes in 2011.
The cuts include a provision that limits city cuts to 3.31 percent of all state aid plus property tax collections in the first year and 7.64 percent in the second year of the budget. County reductions would be less.
The Legislative Advisory Commission meets this afternoon to advise the Pawlenty administration on what it thinks of his budget plan.
Commissioner Tom Hanson of Minnesota Management and Budget should expect an earful. Democratic leaders gave Pawlenty and Hanson a letter Wednesday asking tough questions, such as how many government and private workers will lose jobs due to unallotment.
State law requires Hanson to convene the commission to seek advice on unallotment plans. However, all the commission, or any legislator, can do is give advice. Pawlenty makes the final determination.
Hanson works for Pawlenty.
While Pawlenty announced his plans this week, the actual unallotment plan will not be official until after the new budget begins July 1. And things always could change after that, including when lawmakers come back into session next February or if the courts find Pawlenty exceeded his unallotment authority.
One of several delayed state payments in Pawlenty's plan would save $63 million
This is a delay in refunds businesses receive when they buy capital equipment. The administration says delays will be no more than three months.
Don Davis works for Forum Communications Co., which owns the Bemidji Pioneer.