As the Senate Finance Committee began working on bills to erase the state's $1 billion budget deficit, Sen. Don Betzold, DFL-Fridley, moved to cut $1 million from the day-to-day operations of the governor's office.
Betzold said he has been concerned for a few years about Pawlenty's use of interagency agreements to pay for staff positions in his office.
He told committee members that during the current fiscal year Pawlenty has diverted more than $674,000 from about two dozen other departments to his office, while at the same time calling publicly for cuts in government spending.
"I think the governor's office is spending $674,500 that is coming from other sources," Betzold said. "And I don't mind in the least taking a bigger hit to the governor's office."
Betzold is particularly disturbed that money from the Support Our Troops license plate fund has now been diverted to Pawlenty's staff.
Under current law, he said, half of the roughly $900,000 in the fund is supposed to go to the Department of Military Affairs for financial support programs. The other half is designated to the Department of Veterans Affairs to help homeless and needy veterans.
"The governor's office has taken, last July, took $30,000 out of that account to basically support somebody in the governor's office for veterans outreach purposes," Betzold said.
The actual agreement signed last June by the governor's director of operations and the deputy commissioner of veterans affairs describes the job as a faith and community-based initiatives position. Betzold said the administration recently prepared a bill aimed at ratifying what it's already done. He said he has no plans to consider the measure in his committee.
Sen. Steve Murphy, DFL-Red Wing, accused the governor of backdoor budgeting. Murphy said he and other veterans are disgusted.
"I don't know too many that aren't just -- that know about this -- aren't just hopping mad about having that money that was supposed to go to fund things for veterans going to fund people in the governor's office," Murphy said. "It's just outrageous."
Murphy questioned the legality of the transfer, and Betzold suggested the Office of the Legislative Auditor might be interested in the issue.
But Michael Pugliese, deputy commissioner of the state's Department of Veteran Affairs, is defending the agreement as an appropriate use of the Support Our Troops fund. Pugliese said the staff member is no longer working for his department, but he said the agreement paid big dividends.
"I saw this as a great opportunity to bring somebody on board part-time," Pugliese said. "We only paid a partial, I think 25 percent of her salary, to use her for 25 percent of the time to reach out into the communities that she has already connected with, had rapport with, to identify those veterans and those leaders in the faith based communities so we could connect with those veterans and bring them out for services.
"She was worth every penny."
Pugliese said he was bothered by the dust-up, because he had already explained the matter to members of the Senate veterans committee.
The finance committee plans to look into the practice of interagency agreements for staffing purposes, as well as the statute that currently applies to the Support Our Troops fund.
Committee chairman Sen. Richard Cohen, DFL-St. Paul, said he will hold a hearing within the next two weeks.