Legislature takes budget bite amid rural complaints

The fight for increasingly scarce state money is getting heated.

As lawmakers approved trimming Minnesota spending by $313 million Monday, rural and urban representatives fought over some of the remaining money.

"Greater Minnesota gets the short end of everything we do around there," Rep. Rod Hamilton of Mountain Lake said in joining Rep. Doug Magnus of Slayton and other rural Republicans in trying to take money away from the seven-county Twin Cities area and give it to communities elsewhere.

Rural lawmakers lost their efforts to increase state aid to their areas, but Democrats who wrote the first of three budget bills pointed out that the budget-cutting plan they passed takes a much smaller bite out of local aids than would Republican Gov. Tim Pawlenty: $105 million vs. nearly $250 million.

The overall bill passed the Senate 43-23 and the House 80-51, mostly with Democratic votes.

With a $944 million deficit, bills that passed Monday trim $313 million in programs through most of state government other than health and human services and public school education programs. Those two areas are due to be debated after lawmakers return in early April from a week-long Passover-Easter break.

The Phase 1 House and Senate budget bills differ, so they will be sent to negotiators to produce a compromise. Gov. Tim Pawlenty has not said if he will sign or veto the bill.

The state budget is $31 billion for the two years ending June 30, 2011. However, the recession has reduced the amount of taxes flowing into state government, forcing the $944 million cut.

Pawlenty already has cut $2.7 billion from the budget lawmakers approved a year ago, but the Supreme Court is considering that action's legality. If all or much of the action is overturned, lawmakers say they will go back and look at the budget again.

Rural Republican representatives targeted funding now received by Minneapolis and St. Paul, and, in some cases, Duluth.

Most Democratic-Farmer-Labor Party rural lawmakers opposed the effort.

"Last night when I looked at a map, I didn't see a line drawn between urban and rural Minnesota," said Rep. Paul Marquart, DFL-Dilworth. "Let's not get into this regional warfare."

Attempts to take Twin Cities money upset Rep. Jim Davnie, DFL-Minneapolis.

"It is the rural parts of the state that get the greatest return on their tax dollars, sometimes more than three times as much state aid as they send to the state," Davnie said. "They are no better than the central cities are."

Rep. Tom Rukavina, DFL-Virginia, said the debate really was not urban-rural. He voted against the bill.

"This is an argument between those who want to starve government and people who think government still can help people," he said. "I am one of the latter."

In the end, the Senate and House decided to keep local aid payment in the same ratios as now, cutting from city and county aids less than Pawlenty suggested.

Duluth Mayor Don Ness said that greater Minnesota is hurting financially.

"We appreciate that the Legislature's plan minimizes the pain of the governor's aid cuts, but for many communities, essential city services and property taxes will still take a hit," Ness said at a news conference. "Years of LGA cuts have left many greater Minnesota cities with deteriorating infrastructure and smaller workforces today than a decade ago. Repeatedly cutting LGA is taking greater Minnesota in the wrong direction."

Much of the Senate debate was on Pawlenty's full budget, which failed 56-10.

Senators voted to increase fees on mutual fund sales, bringing the state more than $27 million. The House bill already counted on increase fees.

Republicans complained that Pawlenty's budget short-changed public safety, but less so than the DFL-prepared budgets.

"When it comes down to crunch time, we really have to prioritize," Sen. Bill Ingebrigtsen, R-Alexandria, said.

Ingebrigtsen tried, and failed, to transfer money from an Iron Range fund to public safety.

Almost every area of state spending will be cut under any of the three plans. Among highlights of the bills:

-- The Senate would cut public safety spending 3.2 percent, $58 million, and the House would trim less, $36 million, 2 percent. The size of the Pawlenty and the House cuts match.

-- State-run colleges and universities would lose about 1.8 percent of their funding under either legislative bill, about $50 million. Pawlenty wanted a 3.1 percent cut.

-- All three budget plans trim student financial aid, but in different ways. Pawlenty cuts more than the legislative bills.

-- Court spending would be cut about 1.5 percent by the House, 1.7 percent by the Senate and 2.3 percent by Pawlenty.

-- One of the largest cuts comes in environment and natural resources areas; the House proposed a 5.6 percent reduction and the Senate 5.8 percent. Pawlenty suggested cutting 4.5 percent.

-- Veterans' programs get little or no cuts under any of the three proposals, and some programs would receive small increases.

-- Agriculture spending would fall 7.9 percent under the House bill, including delaying until future budgets $2.3 million in payments to ethanol producers. The Senate bill delays payments $6.6 million.

-- While the governor proposes to eliminate the Film Board, Humanities Commission Arts Board and other entities, the House and Senate voted to keep them, but with less funding. Lawmakers also rejected Pawlenty's proposal to turn off funding to public broadcasters, but again cut what the state donates.

-- The House voted to reduce payments in lieu of taxes $2.8 million; that is state aid paid to local governments when government takes over what was private land, removing it from the property tax roll. Pawlenty wanted a $1.3 million cut.