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Entenza: Unallots to raise property taxes

Gov. Tim Pawlenty's slashing of $300 million in state aid to cities and counties promises to raise local taxes and unequally spreads the pain of state budget woes, says a rival for his job.

The Republican governor said he wouldn't raise taxes "but that promise is wrong," Matt Entenza, a 2010 Democratic gubernatorial candidate, said Wednesday evening, "because there's no question that the governor is raising taxes."

And, the former House minority leader from St. Paul said, "the governor is creating a disproportionate share of the pain for rural communities, including communities here in northern Minnesota."

As part of solving a $2.7 billion budget gap between expected revenues in the next biennium and spending bills crafted by the DFL-led Legislature, Pawlenty on Tuesday included $1.17 billion in delayed school payments and more than $750 million in spending cuts known as unallotments.

Included were $200 million in unallotments to cities and townships and $100 million to counties.

Local Government Aid to cities has been cut by almost 50 percent in the six years that Pawlenty has been in office, said Entenza, most recently the head and founder of the Twin Cities progressive think tank Minnesota 2020. Cities have responded with higher property taxes.

"Yet he has insisted he's not raising taxes," said Entenza, the first DFL gubernatorial candidate out of the chute to travel the state to lambaste Pawlenty's unilateral budget decisions.

"The reality is, in budget after budget, fees and property taxes are forced up by the direction action of Gov. Pawlenty," Entenza said.

Cited Minnesota House Research data on the unallotments, Entenza said Minnesotans' property taxes are likely to increase between 2.9 and 5.2 percent, depending on what region of the state they live in. In some places, the rise could be as much as 10 percent.

"To the governor, these may just be numbers," he said. "But they have a very serious impact on people's lives. This is not government 'tightening its belt'; this is the governor balancing the state budget on the backs of Minnesotans in the most regressive ways possible."

With Entenza at the Bemidji Regional Airport news conference was Bemidji City Councilor Barb Meuers, who said aid cuts of $210.493 this year and $485,685 next year will cause pain in city services.

Pawlenty's LGA cut isn't as bad as the city first envisioned -- $700,000 versus $1 million -- "but while some people might think this is good, this cut comes on the heels of several years of LGA cuts and cut services to Bemidji," she said.

"We now will have fewer options to deal with future budget challenges," Meuers said. "Bemidji cannot afford to lose LGA; we do not have the property base nor the income base to pay higher property taxes."

Meuers wants Pawlenty to rethink his LGA unallotments and "start valuing our city and how we will struggle with this cuts."

But Pawlenty, who isn't seeking another term, said Tuesday that the cuts amount to only 3.31 percent of state aid plus levy the first year and 7.64 percent the second year. Cities need to stop spending so much, and will have a year to adjust to the larger cut.

He accused cities and counties of increasing spending even though Minnesota families and the state are trimming expenses to match the economy.

"Perhaps they didn't fully understand the full magnitude of the economic crisis that we were facing," Pawlenty said. "Hopefully now they have the message that when everyone else is living on flat or reduced spending, they should too."

Asked about expected reaction to his unallotment plans, Pawlenty expected it fast and furious.

"Whatever criticism I get for these decisions ... will come in stories you write for tomorrow," he told reporters. "The criticism is going to come not two years from now, it will come two hours from now."

Entenza flew around the state Wednesday to lash out at the unallotments, and he's a candidate for Pawlenty's post.

"I've been crusading about the importance of Local Government Aid since the early 2000s," he said, and the last two years as Minnesota 2020 board director.

"This is not a new issue, this is a tremendous unfairness to rural communities," Entenza said. "I am very proud to be the only candidate and I think the only DFL politician of any stripe that's actually gone around rural Minnesota and making the case."

Other potential DFL candidates for governor instead issued statements about the unallotments.

"Indeed, it is a sad day when Minnesota's representative government cannot work together to solve one of the most pressing economic and fiscal disasters our state has ever faced," said one of those candidates, Ramsey County Attorney Susan Gaertner.

"For anyone to call the governor's action 'strong leadership' would belie the essential meaning of good government and principled service to its constituents," she said, calling upon Pawlenty to call a special session of the Legislature that "includes the possibility of multiple options and have the intention of putting our state back on track and easing the considerable pain that the unallotment process will surely bring."

Pawlenty's cuts "are simply the ultimate example of his values: Do everything as cheaply and quickly as possible and never look back at the consequences," said Rep. Paul Thissen, DFL-Minneapolis.

"And Minnesotans are left with the fallout: a budget deficit that remains unfixed, tax burdens shifted to homeowners and Main Street businesses, underfunded hospitals, and elimination of important services like mental health services for kids and adolescents and emergency heating and food aid--problems that don't go away just because the funding has been eliminated," he said.

"Blatant deception is about the only tool the governor has left to shield his true ambitions and motives - both of which have everything to do with getting him elected president, and nothing to do with helping Minnesotans," said Rep. Tom Rukavina. DFL-Virginia.

"Along with students, the governor is going after seniors, renters, the poor, disabled and mentally ill to pay for the budget deficit he created when he vetoed the Legislature's balanced budget. It might help protected his national conservative credentials, but it weakens the Minnesota we all value and cherish," Rukavina said.

"The governor's action is in line with his recent veto of the anti-bullying bill. Tim Pawlenty has become the schoolyard bully; he is picking on the sickest, most vulnerable people in our state," said Sen. John Marty, DFL-Roseville.

"While the governor tried to minimize the impact of his cuts on cities, schools and hospitals, those cuts will cause real harm to real people," Marty said. "But the unallotments where the governor showed the least compassion were in the cuts to health and human services. He used a long string of adjectives to decry the rapid growth of General Assistance Medical Care -- even though this growth is caused by more adults losing their jobs and their health care, and are in desperation turning to GAMC."

The governor did what he had to do where the Legislature failed, said the Taxpayers League of Minnesota in the GOP governor's defense.

"The state Legislature was in session for five months and the governor had said from the beginning that he would oppose resolving the deficit by raising taxes in a struggling economy," said Taxpayers League of Minnesota President Phil Krinkie. "The failure of the DFL leadership to find compromise has forced the governor to solve the state budget. We applaud the governor's position against tax increases and hope legislative leaders will cooperate with the administration."