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Pawlenty lays out budget cuts

Minnesota's cities, counties and poor people in need of health care would be most affected by Gov. Tim Pawlenty's plan to balance the state budget.

Pawlenty this morning announced that he would cut:

-- $250 million from city and county aid, the second time in a year they have faced a similar-sized cut.

-- $347 million from health-care programs, affecting 40,000 people.

-- $387 million from other health-care funding, although federal funds are supposed to replace it.

-- $47 million from state colleges and universities.

-- $181 million from most state agencies and other programs.

Pawlenty said that he set priorities when he made his proposals, but federal rules tied his hands. The Republican governor said he would have cut higher education funding more than he did, but since the state accepted federal funding last year rules limited how much he could cut.

As for city and county aid, Pawlenty said those programs just are not as important as ones he saves, such as public schools, the military, veterans and public safety.

"The historic drop in the economy has caused an historic drop in state revenues," Pawlenty said. "Government has to live within its means by setting priorities and tightening its belt just like everyone else."

The head of the League of Minnesota Cities called local cuts "catastrophic." Jim Miller said that without state tax increases, cities will have no options other than to raise property taxes or cut services.

Cities already have cut budgets, he said, and there is little left to cut.

Even before today's $1.2 billion action, Pawlenty cut $2.7 billion from the budget last summer, bringing total spending for the two years to just above $30 billion.

A new budget is due around the first of March, telling Pawlenty and lawmakers how much money they have to work with this year.

Before today's announcement, Pawlenty said he would do most of the balancing by cutting spending. That did not please people who depend on state money, such as nonprofit organizations.

"Minnesota is not unique in facing budget shortfalls over the past few years," said Nan Madden of the Minnesota Council of Nonprofits;' Minnesota budget Project. "But a majority of states have taken a balanced approach to addressing these shortfalls, making budget cuts but also raising revenues. Relying on cuts alone makes it difficult for states to maintain adequate funding for health care, education, helping people who are out of work, and other services that Minnesotans are counting on more than ever in this tough economy."

Davis reports for Forum Communications Co.