Is Minnesota’s $4.5 billion deficit a crisis or an opportunity? It’s a lot of both.

Lawmakers will face a shortfall as large as any the state has seen in decades, an issue that will dominate the session and require many hard decisions. Their jobs will be made

harder by the threat of veto by Gov.-elect Tim Pawlenty if their budget bill includes tax increases. They have to find a way to save 13 percent of the state’s budget. In that budget, around 80 percent is spent on education, health care, and crucial local government aid that keeps local property taxes down. Cut any of those areas and the people of Minnesota will feel it.

At the same time, Pawlenty seems to savor this would-be predicament as an opportunity. He’s an advocate of limited goverment spending, and there’s no better time to make that a reality than when circumstances require cutbacks. Pawlenty is an energetic and creative leader, and he’s proposing innovative ideas like farming out state programs to the private sector to save money. But estimates say even if all his ideas are implemented, it still won’t patch up the budget completely.

In the end, the state will benefit most if the two sides &045; Pawlenty and the Republican House, and the DFL-controlled Senate &045; can find common ground. Nobody likes statewide tax increases, but for cities like Albert Lea, they are better than having local government aid gutted, propelling property taxes upward and bringing cuts to services offered by city and county government, which is closest to the people. If the sides can find a reasonable compromise, involving better state efficiency, spending cuts or freezes, and minimal or temporary tax increases, this area, and the state, will be better off than if Pawlenty persists in his pledge not to increase taxes.

Tribune editorials represent the opinion of the newspaper’s management and editorial staff.