Minnesota lawmakers have approved $300 million in spending cuts -- enough to erase roughly one-third of the state's budget deficit.
The action is the first step in a budget balancing process that may be helped along by the federal government.
Republicans and Democrats disagree over the best way to resolve the state's nearly $1 billion budget deficit but on Monday they overwhelmingly agreed on one thing -- they don't like Gov. Tim Pawlenty's budget plan.
Both chambers defeated legislation that resembled Pawlenty's budget -- in whole or in part -- by wide bipartisan margins.
Most of Pawlenty's proposed cuts are similar to those put forward by DFL legislative leaders, but the big difference is the governor wants deeper cuts in aid to cities and counties.
DFL House Majority Leader Tony Sertich said Democrats are proposing $105 million in cuts to local government aid, less than half of what Pawlenty suggested.
"We've heard from mayors and city council members," he said. We've heard from community members, seniors living on a fixed income and others that we should make a priority to make sure that we don't interrupt that fiscal relationship between the city and the state too severely that will impact police and fire, local public safety, impact jobs on the local level and negatively impact property taxes."
“This is not an easy bill, whether you think state government ought to be doubled or cut in half.”Sen. Dick Cohen, DFL-St. Paul
DFL legislative leaders put forward Pawlenty's budget plan in order to force Republicans to accept or reject it. The House and Senate later approved their separate budget bills.
Sen. Julianne Ortman, R-Chanhassen, was one of several Republicans complaining that Democrats were only proposing a partial budget solution. She warned that Democrats are waiting to reveal a tax increase.
"Starting with a full picture is much better than doing it in dribs and drabs and then trying to surprise Minnesotans on the last day of session with the rest," Ortman said. "The other shoe will drop, members, and it will drop on the last day of session when Sen. Pogemiller and Sen. Cohen decide they're finally going to play out the game. I don't think we should wait that long. We should adopt the governor's budget as a starting place."
However, a tax increase might not be needed. One wild card is the amount of federal money that could come to the state in the next month and a half.
The health care overhaul bill and a jobs related bill could bring upwards of $700 million in federal funds to Minnesota. DFL House Speaker Margaret Anderson Kelliher says that money will help fill Minnesota's budget gap.
"There's probably a little more trimming to be done in the budget, but it's really quite different than what people thought it might be last November and December," she said.
DFL Senate Majority Leader Larry Pogemiller says he hopes the Legislature and Pawlenty will accept the federal money and continue to work on fixing the state's long-term budget problems. But he admits that lawmakers, who are all up for re-election this year, might defer the tough decisions until next year.
"Federal money coming in right now, I think, will allow too many state policy makers to avoid the long-term decisions that need to be made," Pogemiller said.
For his part, Pawlenty says he prefers to reach an overall budget agreement with the Legislature but hasn't ruled out signing their first spending reduction bill.
Meanwhile, Pawlenty is asking Attorney General Lori Swanson, a Democrat, to review the legality of the federal health bill. Pawlenty questions whether a measure requiring every individual and business to offer health insurance meets constitutional muster.
Because Pawlenty and Swanson are separately elected constitutional officers, Pawlenty's letter is only a request. Swanson's spokesman said the office hasn't reviewed the bill yet and won't comment until they do.