Parties take on Ventura with budget deal

Published 12:00 am Wednesday, February 20, 2002

AP and staff reports

ST.

Wednesday, February 20, 2002

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ST. PAUL – House and Senate leaders agreed Tuesday on a way to fix the state budget deficit and possibly push Gov. Jesse Ventura to the sideline in the process.

The compromise splits the difference between what the House, led by Republicans, and Senate, led by Democrats, previously proposed to close a projected $1.95 billion gap in the two-year state budget ending in June 2003. It avoids raising taxes and cuts spending by $374.2 million.

But legislators also moved to take Ventura, who belongs to a third party and proposed raising taxes to help fix the deficit, out of the debate.

&uot;It is a significant day for people in Minnesota,&uot; said Rep. Dan Dorman, R-Albert Lea. &uot;There are partisan conflicts, different

interests between urban area and rural. But at the end of the day, we came up with the agreement. This is a remarkable thing.&uot;

While the leadership of the House Republican and Senate Democrats were working together to crunch the numbers, Dorman contributed to putting some details on agriculture finance.

&uot;If you ask whether everything I wanted is in the plan, the answer is no. But the bipartisan plan will surely help rural Minnesota,&uot; Dorman said.

House Republicans and both Senate Democrats and Republicans endorsed the budget deal. But if Ventura were to veto it, House Republicans would need some Democrats to vote with them to get the two-thirds majority needed to override the veto.

House Democrats didn’t go along with the compromise, putting themselves in a powerful position to sway the budget battle. The leader of the House Democrats, Tom Pugh of South St. Paul, said most of them have ”grave concerns” about the House-Senate compromise.

But the caucus doesn’t appear united behind an alternative – or something it wants in exchange for its support.

And, Pugh said, ”The risk of what Governor Ventura may do is something we have to balance.” He was referring to Ventura’s power to cut spending by himself if the Legislature fails to agree on a budget solution, an outcome many legislators fear.

Ventura’s spokesman, John Wodele, said the governor doesn’t believe the legislators’ compromise is fiscally sound. Wodele declined to speculate whether Ventura would veto it.

Ventura asked Finance Commissioner Pam Wheelock to contact Wall Street bond-rating agencies to get a read on how the proposal would affect Minnesota’s top credit rating, Wodele said.

Legislative leaders said they aim to put the bill on Ventura’s desk as early as Thursday. But rapid movement is rare on such important legislation. ”I’m sure there’ll be lots of snags,” said House Speaker Steve Sviggum, R-Kenyon.

And, beyond hammering out budget details, legislators must find enough common ground to succeed in the political gambit of marginalizing Ventura.

Since Ventura’s 1998 election stunned the state political establishment, the Independence Party governor has held sway over the divided Legislature. In his first year, Ventura sided with Democrats on weighting income-tax cuts to the middle class. Last year, he sided with Republicans in reforming property taxes.

If Ventura vetoed the budget compromise and withstood override attempts, his own deficit-reduction proposal – making $700 million in cuts, raising $400 million in taxes and using $650 million in reserves – might gain traction.

At the least, he could order a stop of spending that’s already been authorized for the two-year budget cycle, a move known as unallotment.

Sviggum said that’s the risk House Democrats face by not going along with the compromise. ”They will have to make a decision whether they want to force unallotment, pain and havoc and chaos in the state of Minnesota,” he said.

In addition to the spending cuts, the compromise announced Tuesday would draw $1.4 billion from budget reserves and other special accounts, and it includes $131 million in one-time spending reductions, such as grant cancellations.

The legislators haven’t decided how to fix the projected deficit of $2.5 billion for the next two-year budget cycle, fiscal years 2004-2005. But they’ve agreed to start by cutting another $720 million in spending and eliminating adjustments for inflation, which would save $1.1 billion.

House Democrats don’t want any cuts to education – public schools, colleges or otherwise. The $15 million in K-12 cuts proposed in the House-Senate compromise would come entirely from the Department of Children, Families and Learning operating budget. Pugh said he would cut more consulting contracts instead.

The deal makes moot plans that had been moving on a fast track through the Senate and House.

Last week, the Senate approved a plan that would have cut spending by $200 million, dipped into rainy-day reserves and revived accounting shifts the state had been moving away from in recent years, such as a sales tax provision that would have moved up the schedule for businesses to pay some taxes.

The House GOP earlier proposed spending cuts of $650 million, partly by eliminating 2,650 state jobs.

Marcia Avner, public policy director for the Minnesota Council of Nonprofits, said it appears the House-Senate agreement is moving in the right direction. But she’s withholding further comment until details on cuts are released.

”We take a bullet,” she said. ”We hope we take it in the shoulder.”

Ashley H. Grant may be reached at agrant(at)ap.org