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Another nice mess they've got us into

Oliver Hardy would utter to Stan Laurel in the midst of one of their numerous com-plicated dilem-mas, "Well here's another nice mess you've gotten me into."

These could be the words you might have heard Speaker Mar-garet Ander-son Kelliher voice to Senate Majority Lea-der Larry Pogemiller at the conclusion of the 2009 legis-lative session early May 19.

If anyone was watching the final minutes of the House or Senate debate late Monday night, one would have to ask the same question: How did they get into this mess?

Well to be clear, we need to rewind to the end of the 2008 legislative session, just one year ago. I wrote a story last year titled "How they balan-ced (Read: cooked) the books," recapping the 2008 session. This column pointed out that legislators didn't really bal-ance the budget but merely pushed the 2008 budget prob-lem down the road into the 2009 legislative session. Near-ly a quarter of our budget problem, $1 billion, was due to overspending last year. Of course, who wants to control spending in an election year?

Between June and November, the bottom dropped out of the national economy and so the November state budget forecast was $4.8 billion in the red for the 2010-11 budget, or roughly a 12 percent shortfall.

In January, at the start of the 2009 session, the Demo-crat leadership spoke of bud-get reform and such things as zero-based budgeting. But it soon became obvious it was all just rhetoric as they played a stalling game, waiting for the Obama administration to hand out billions of federal dollars that would bailout state governments.

With the March budget forecast, the budget problem grew worse, showing a $6.4 billion shortfall. With the inclu-sion of federal money, Minne-sota's budget problem was now calculated at $4.6 billion.

At the outset, Gov. Pawlenty stated he was committed to bal-ancing the state's budget with-out raising taxes and present-ed a proposed budget in late January with no tax increases.

The response by the DFL was to take a "misery tour" a-round Minnesota, to bash the governor's budget, even thou-gh they had no alternative budget proposal themselves.

Finally in April, the Demo-crats revealed their plan: mas-sive tax increases and relative-ly small spending reductions. The House passed a $1.5 billion tax increase and the Senate tax bill weighed in at a hefty $2.2 billion in new taxes.

The stage was set from that point on for a showdown bet-ween the governor's adminis-tration and the Legislature, with Gov. Pawlenty holding firm to "no tax increases" and the DFL-controlled Legisla-ture unwilling to make the nec-essary spending cuts to their various favored programs.

With just 10 days before the constitutional deadline for the Legislature's adjournment, Democrats rushed through the legislative process a "smal-ler" $1 billion tax bill. But even if they had been able to entice the governor to support this version, it would have left a $2 billion budget gap.

Gov. Pawlenty's response was swift: issuing a veto of their tax bill at 3 a.m., just hours after the bill had pas-sed in the House and Senate.

On May 13, the Legislature completed its work on all major finance bills and sent the final appropriation bills to the governor. The expectation was Gov. Pawlenty would veto several of the large spending bills and Round 2 of the budget battle would ensue -- probably necessitating a special session.

But to everyone's surprise, Gov. Pawlenty announced he would sign all of the Democrats' spending bills, and the catch was that if the Legislature could not com-plete the rest of the necessary budget balancing through shifts and spending cuts before Monday's adjourn-ment, the governor would execute line-item vetoes and unallotments to unilaterally balance the budget.

The Democrats had passed spending bills totaling $34 billion and could account for only $31 billion in revenue, leaving a $3 billion budget hole.

The befuddled DFL leaders were torn regarding how to spend the remaining four days of the legislative session. Disagreement between the House and Senate leaders about how to resolve the budget lingered, with some legislators wanting to propose further cuts and others wanting to blame the governor for the spending reductions. When in doubt, try yet another tax increase.

In the final moments of the session, Democrats tried one last "Hail Mary," passing an-other billion-dollar tax incre-ase along with a K-12 accoun-ting shift. This bill, like its sim-ilar predecessor, had the same fate: a gubernatorial veto.

So with lawmakers heading home, the burden of balancing the state's budget shortfall was left for the governor to resolve. While ending somewhat more abruptly and certainly more timely than many of us had anticipated, the outcome of this session was fairly obvious from the outset.

Gov. Pawlenty was not going to raise taxes, there would not be three Republican House members willing to override Pawlenty's vetoes and the Democrats just couldn't bring themselves to reduce state spending. The 2010 session is likely to be a replay of 2009 with Democrats pushing for unsustainable levels of spending creating yet another budget mess.

Phil Krinkie is a former Repub-lican state representative from Lino Lakes and the president of the Taxpayers League of Minnesota.