Tired and frustrated, Borderland’s two state lawmakers said Wednesday that budget deals made during this week’s special session ended the government shutdown, but also created concerns for the future.
The state government began to call back workers and resume operations after a 12-hour special legislation session that ended after 3 a.m. Wednesday.
“I didn’t like having to do it in the dark of night without public participation and public input,” said Rep. Tom Anzelc, D-Balsam Township. “It was poorly managed, the majority didn’t give us much lead time to read the bills, either online or in hard copy.”
Anzelc continued, “In messes like this, there is never really any one clear winner and any one clear loser and the people are going to decide this in November 2012, when they’ll get the chance to decide if our (Democrats) approach, which was more a balance of cuts and progressive revenue, was preferable to what we did, and what we did was borrowing, shifting and cutting.”
Added Sen. Tom Saxhaug, D-Grand Rapids, “I am not happy with the final solution, but I recognized the need to get our state back to work.”
Saxhaug explained that the final agreement that closed the $1.4 billion gap shifted another $700 million, for a total of $2.1 billion, from schools and sold $700 million in tobacco bonds.
“While there is additional revenue it will be years before we pay off that debt,” said Saxhaug. “We are using a proposal that Tim Pawlenty suggested when he was governor. That was a bad idea then and is still a bad idea today. This agreement does nothing to fix the problems we have in our state budget.”
Anzelc said lawmakers — both Democrat and Republican — don’t realize that the problem is back in 2012 and in 2013.
“This deficit situation — we haven’t resolved it, but just put Duct tape on it,” said Anzelc.
Locally, International Falls City Councilor Tim “Chopper” McBride reports that the state budget will result in the city of International Falls losing an estimated $441,037 it anticipated receiving from the state in 2011 in local government aid and market value homestead credit.
“It certainly has consequences,” said McBride of the cuts made in the budget deal. “The city, however, is still strong and viable and will figure out what to do without sacrificing services or manpower. We will persevere.”
Teresa Jaksa, Koochiching County administrative director, said the actions in St. Paul this week make it tough to say what the impact to the county will be from the budget deal.
While she said county officials expected cuts from both the proposals by the governor and the Legislature, the budget bill will have to be reviewed.
“Some things we thought would happen didn’t and PILT (a loss of Payment in Lieu of Taxes paid by the state on state land in the county) was an example,” she said. “We assume we will retain that because they came up with a revenue source instead of a cut. But until the figures are out and we can review this, it’s a little too early to say how it will impact the county.”
And, she noted, county officials are concerned about the state budget impact coupled with changes at the federal level, where a budget bill is now being developed.
Falls Councilor Cynthia Jaksa serves as the chairwoman of the city’s Finance and Legislation Committee.
“I am devastated by the results of this legislative session,” she said. “My reaction initially is a little bit of hand wringing. We will get through this. We will see what we need to do as far as making discretionary cuts for the short term.”
Cynthia Jaksa said she was disappointed the budget bill included no tax reduction.
“They had to come to some resolution and it was too painful to continue on the path we were on, but I think that the whole thing is so unfortunate the way it worked out — borrowing money from school districts because you refuse to put the tax rate back to where it was before we had these issues.”
Anzelc said he voted against the revenue bill because it borrows money from the tobacco bond money and from public schools.
“It’s another 10 cents on the dollar the (school districts in his district) will have to borrow because the state is withholding another 10 cents on the formula. That’s a bad thing,” he said.
Big impacts expected
Saxhaug said the budget passed by the Republicans increased property taxes on all Minnesotans by $1 billion, cut 140,000 of the state’s vulnerable citizens off their health care, reduced special education by $56.5 million, and made the biggest cuts to colleges and universities in the state’s history.
“It hurt the shrinking middle class just to protect the 7,700 millionaires in the state from paying the same share of taxes you and I pay,” said Saxhaug.
Anzelc said he voted against the tax bills, but cuts were avoided to PILT and the Sustainable Forest Incentive Act, which helps keep private woodlands open to public use, which he said are both important to Koochiching County. In addition, he said revenue from a mining tax shared between Koochiching and Carlton counties was retained. Koochiching uses the money to fund its economic development agency and solid waste activities.
“So there were victories in that bill, but I couldn’t vote for it because the revenue to pay for these things was so bad,” said Anzelc. “We’re borrowing like the federal government borrows and you know what that’s like.”
Saxhaug also voted for the final environment and natural resources budget bill, which he says kept the forest industry competitive.
“It does use a substantial amount of one-time funding which just creates the same problem for us in the next budget cycle. The economic development bill is critical for promoting job growth and that was another bill that I voted for,” he said.
Anzelc said he voted for the bonding bill, despite no projects in his district being included. Locally, money had been sought for the Renewable Clean Air Project, a sewer project, and the Voyageurs Heritage Center.
Anzelc said he voted against the K-12 education bill because it cuts funding to Rainy River Community College and “we’re going to end up owing our school districts collectively close to $4 billion. That’s $4 billion that the state told 435 school districts it was going to provide for uniform education for youngsters and we’ve withheld that money to balance these budgets.”
Anzelc said he is concerned about the health and human services bill, which he said cuts the payments to personal care attendants for people with disabilities and cuts nursing home payments.
Saxhaug said lawmakers must “stop using shifts, gimmicks and borrowing to help us generate a more stable state economy. My hope is that in the next budget cycle we can have true tax reform like a lower sales tax rate that covers more goods and services and income tax reform that relies less on exemptions and deductions.”
