Gov. Tim Pawlenty did what he promised he would do if a House-Senate conference committee couldn’t reach an agreement on the 2003 budget deficit. On Friday, he &uot;unalotted&uot; $281 million from the state budget and tapped another $74 million in reserves and delayed payments. Included is a $20 million reduction in ethanol payments.

After talking with conferees and other members earlier last week, it seemed inevitable that an agreement might be out of reach. I believe the biggest stumbling block all along is that the Senate was hesitant to agree to spending and program reductions that the House proposed that would have helped narrow the budget deficit for the 2004-05 period. The question is, when are we going to begin addressing the $4.2 billion budget deficit? Now or later? The Senate chose to wait. There will be a very long session ahead.

In the governor’s State of the State address earlier, he reminded us that even after the legislature fixes the state’s $4.5 billion budget hole, the budget will still grow. It was amazing to learn, that since the governor first proposed his emergency budget plan a few weeks ago, some $822 million has been spent from the state treasury.

Tax tip

As you prepare your income tax returns, don’t overlook the Minnesota K-12 Education Subtraction and Credit (Minnesota tax form M1ED). The K-12 education credit is designed to help families pay expenses related to their child’s schooling, from kindergarten through 12th grade. Both programs lower the tax you must pay and may even provide a larger refund. This tax year, the credit has been reduced to 75 percent of qualifying educational expenses.

If your federal adjusted gross income is less than $37,500, you may qualify for the credit and subtraction. If your household income is $37,500 or more, you may qualify only for the subtraction.

Be prepared to show documentation. In general, qualified expenses include fees and tuition for classes or instruction taken outside the normal school day, purchases of required materials, fees paid to others for transporting your child to and from school, and computer hardware and software (up to $200) for education use. You can find more information online at www.taxes.state. mn.us/individ/factshts/individ/fs8_02.html.

Got a question or concern? Write me at 579 State Office Building, 100 Constitution Ave., St. Paul, MN 55155, or call me, toll-free, at 1-877-377-9441. My e-mail address is rep.dan.dorman@house.mn.

Rep. Dan Dorman, R-Albert Lea, represents Freeborn County and part of Mower County in the Minnesota House of Representatives.