Death by a Thousand Cuts

How does Minnesota's fresh-minted 2003 budget make this a meaner place? Let us count the ways

If the State of Minnesota had received a nickel every time Governor Tim Pawlenty used the phrase "tough choices" over the past five months, it would have been well on the way to solving its $4.2 billion deficit. The phrase proved an all-purpose mantra for the Governor, simultaneously connoting machismo, integrity, and even an unearned hint of compassion for those who were bound to suffer by the time he was done.

How did we get here? As a state senator, Pawlenty championed an income tax cut for the 2000-01 biennium that was the largest in the nation during that season of wholesale tax cuts. (The average reduction in Minnesota was $575 per capita; Connecticut was second at $216.) Two years ago, Pawlenty helped broker a deal with then-Governor Ventura that saw the state take on nearly a billion dollars in education funding expenses--expenses formerly borne by local property taxes--without specifying any means to pay for them. And last year, Pawlenty and then-Senate Majority Leader Roger Moe worked out a short-term deal that depleted the budget reserve and employed a variety of accounting gimmicks to ensure that both men could run for governor without onerous spending cuts or new taxes on their résumés.

These legislative actions, as much as the torpid economy or unbridled government spending on "human services," is why Minnesota was $4.2 billion in the hole coming into this session.

Despite Pawlenty's "tough choices" rhetoric, the overwhelming size of the deficit actually made it much easier for him to push unprecedented spending cuts. The traditional beneficiaries of state social spending were on the defensive from the start: Who among them would dare fail to answer the call for sacrifice? The most obvious rejoinder to Pawlenty's austerity rhetoric would have been to suggest the reinstatement of some eliminated taxes, but Pawlenty never considered that option, and he was never seriously pressed to do so by the putative DFL opposition.

Now that the 2003 session has torturously crawled to a close, the governor's rhetorical flourishes concerning "tough choices," "shared sacrifices," "personal responsibility" and "no new taxes" will become reality, with many changes occurring on July 1. Pawlenty and his legislative cohorts won't brook any talk of consequences: "doom and gloom scenarios," Senate Majority Leader Steve Sviggum calls them, adding that the important thing for people to remember is that "we didn't raise taxes or cut into core services."

Is it really that tidy? What follows is a look at some--by no means all--of the cuts to education and social spending programs likely to be handed down to Minnesotans in the days ahead.

 

A Tax by Any Other Name

By hammering on their "no new taxes/protect core services" theme, Pawlenty and the Republicans are engaging in a kind of semantic jujitsu designed to convey the impression that they are enabling most Minnesotans to continue their current lifestyles without taking a financial hit from state legislation. In fact, their budget is riddled with hidden costs that amount to crypto-taxes in themselves.

Let's count the ways.

The state's approximately $400 million cut in higher education funding means that tens of thousands of students attending the University of Minnesota and the MNSCU system of state colleges will face tuition increases ranging from 13 to 20 percent in each of the next two years, even as staff is laid off and programs are cut at those institutions.

Thirteen thousand nursing home residents who pay for their own care--the vast majority of whom lack any supplemental insurance--will be shelling out an additional $2,028 per year each: not to improve care at their facilities, but to help balance the state's general fund.

Bus fares will increase while service routes are cut.

The cost of court filings will rise as much as 600 percent, and that still won't be enough to offset cuts to the system that will add more delays in the legal process.

Exempting Northwest Airlines from paying $4 million into the state petroleum cleanup fund makes it likely that the state's gas tax will go up (at least briefly) in each of the next two years.

And there are literally dozens of fee increases for citizens who use the state's social services programs. They will apply not just to the poor and disabled, but to working families who use child care as well.

The granddaddy of the hidden taxes passed on by the Pawlenty budget involves cuts of approximately $140 million in local government aid (LGA) funds. Pawlenty and the legislators know that most Minnesota cities and towns desperately need that money to function, so they have allowed them to recoup 60 percent of it in property tax increases. This property tax shift will hurt residents of cities and rural towns much more than suburbanites. According to the Star Tribune, assuming the full 60 percent is levied, it will trigger a property tax increase of 28 percent in Duluth but just 2 percent in Edina, with property owners being hit with an 18.5 percent increase in St. Paul and 12.5 percent in Minneapolis.

There's more: Because those tax increases will only cover three-fifths of the state's cut in aid, many local governments will be forced to choose between police and fire protection, libraries, schools, and parks. In other words, state legislators have simply passed the buck for raising taxes and cutting core services to the mayors and city councils in towns across Minnesota.

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