Polls actually said time for Pawlenty to bow out of reelection

Governor Tim Pawlenty picked a good time to announce he would not seek reelection. Next month, the stuff hits the fan. That’s when he starts unalloting. Legislative leaders asked him this week to “tell us the specifics of your job losses, classroom size increases, service reductions, property tax increases and facility closings.”

Pawlenty put on his usual good show for the press at the announcement. But he almost waited too long. Each day one was seeing less of Timmy the Dreamer and more of his evil twin Trimmy. The Boy Scout with a switchblade, as one wag put it. He had begun calling out mayors and others who see his impeding budget slashing as less than Nirvana.

In the final days of the legislative session, the AP quoted University of Minnesota President Bob Bruininks as saying Pawlenty’s proposed cuts to the university were “savage and severe” and would damage the university and the economy. Bruininks said the cuts could trigger a 15 percent tuition increase and a loss of up to 750 additional
university jobs. Asked about the university’s concerns at the press conference, Pawlenty said that is what one gets from “whiners.”

When hospitals tallied up their expected job losses at 7,000, Pawlenty simply dismissed their figures out-of-hand, calling them bloated without offering any evidence of his claim.

Pawlenty told the press he would have won reelection and cited a recent KSTP/Survey USA poll showing him leading against possible DFL candidates—just barely though against some.

But he didn’t mention another KSTP poll that showed more Minnesotans disapproved of him than approved, or another poll that said 57 percent of Minnesotans felt he should not run for reelection. Then there was the Star Tribune poll that showed identification with the Republican Party in Minnesota at a decade low and strong public
disfavor for the type of cuts Pawlenty is about to make.

Conservatives have been busy trying to shore up support for his decision to go-italone and cut $3 billion without legislative or public input. Steve Young argued on these pages the legislature should have just accepted what Pawlenty sought originally—heading off a portion of the budget cutting by borrowing and spending $1 billion now at a future cost of $1.8 billion.

Former Finance Commissioner Jay Kiedrowski, however, viewed this as the worst of the alternatives. “This is like stealing from your child’s piggy bank with no intent of repayment.” Further, he argued, it was a one-time use of money when the real problem to address was a long-term gap between expected spending and revenues. He favored
income tax increases as part of the way to right the state’s fiscal ship for the long run.

Since both the legislature and the governor initially sought similar levels of budget cuts, Young argued the debate was between new taxes or no new taxes. The legislative leaders’ goal, however, was fiscal responsibility--the same as Kiedrowski’s—pay-as-you-go this biennium and work toward structural balance in the long run. Senate
Majority Larry Pogemiller and Speaker Margaret Kelliher were trying to be the adults in the room. Their goal required some new taxes. The legislature did its work. It adopted spending bills that reflected the level of budget cuts the governor and legislature agreed
to. Then it adopted the revenues needed to pay for these appropriations.

Quixotically, Pawlenty signed into law the spending measures, but then vetoed the revenue bills creating a $2.7 billion deficit this biennium and a bigger one next biennium. Permanent deficits as far as the eye can see. A nice little election present for whoever succeeds him.

Young wrongly characterizes the long-term structural balance problem as temporary. Minnesota’s imbalance is not temporary. Present budget cuts will help balance future budgets, but no economist believes economic growth will return revenue to its former levels any time soon. In addition federal recovery funds and funding shifts are temporary fixes that mask the problem. Two years from now a huge deficit occurs even with an economic recovery.

The public supported a balanced approach. A Star Tribune poll showed the public favored a mix of tax increases and spending cuts. By a two-thirds margin, the public favored the legislature’s choices of higher taxes on high incomes and higher alcohol taxes. Young argued either raising taxes or cutting spending would hurt the economy in a
recession. However the state economist said cutting spending would hurt the economy more than raising taxes. On balance, the legislature’s plan was best for the economy now and into the future. Pawlenty’s actions trigger the worst outcome—the highest amount of
additional job losses in a recession.

Pawlenty’s borrowing scheme did not pass muster even with Republican legislators. Only two House members voted for it. When it went down in flames, Pawlenty never offered an alternative. Nor did he, as is the custom, negotiate in good faith for an alternative. Instead, he set his sights on the solution the public least favored—
even deeper cuts to higher education, police, fire, hospitals and nursing homes.

Pawlenty’s unprecedented use of unallotment authority may cause real cuts in school budgets as well. He vetoed the authority to shift a portion of school payments to another biennium. He now says he intends to do it anyway. However, because of his veto, authority to make good on those delayed payments to the schools is not guaranteed.

Think of Pawlenty’s approach to budgeting as that of a mortgage broker in good old 2005.

“Look, if you can scrape enough money to make the first year’s mortgage payment, you’ve bought yourself a house.”

“But it doesn’t appear I can make the payment again next year.”

“Don’t you worry about that. You want the house, don’t you? We want you to have it. Sign right here.”

Maybe that’s the governor’s next gig: Tim Pawlenty’s Subprime Budgets R Us.

Wayne Cox is executive director of Minnesota Citizens for Tax Justice