Is it a coincidence that six months after Tim Pawlenty finished his term as Minnesota’s governor the state government has been shut down by an impasse over how to balance the budget? Not according to Minnesota Democrats. Pawlenty’s home state critics say he contributed to the predicament in three ways: he failed to correct the structural imbalance in Minnesota’s finances, he balanced his own budget by pushing expenses into the future for which the bills are now coming due and he abdicated his leadership responsibility to help Minnesota find a sustainable budget trajectory.
“Pawlenty’s policies and leadership, or lack of it, on the budget in Minnesota created the setting for the current crisis that we’re in,” says Minnesota state representative Jim Davnie. Pawlenty was insistent during his tenure on sticking to his pledge not to raise taxes.
With the exception of a cigarette tax he agreed to during the 2005 shutdown he stuck to that pledge. (Pawlenty is fond of claiming that he never raised taxes as governor, reasoning that the cigarette tax is a “health impact fee,” with the funds earmarked for healthcare costs to defray the social cost of smoking.) With the state government starved for revenue, Minnesotans have been paying through other means: local property taxes rose regularly to pick up the slack in funding for government services, although Pawlenty then signed a property tax cap in 2008. Meanwhile the state government imposed brutal budget cuts. For example, the University of Minnesota is freezing wages, cutting costs and raising tuition to compensate for a decrease in state funding.
Without increasing revenue, though, Pawlenty was unable to cut spending sufficiently to balance the budget. Instead, “Pawlenty used every budget gimmick and shift,” says Kristin Sosanie, communications director for the Minnesota Democratic Farmer-Labor Party. “He borrowed money from K-12 schools and put off payments to falsely balance the budget.” Specifically, since Minnesota budgets on a biannual cycle, the state had given 90 percent of funding for education to localities in the first year and 10 percent in the second year. Pawlenty shifted the balance to 70-30, making his last budget seem balanced but leaving a $1.4 billion hole in the budget that Governor Mark Dayton is trying to balance now. Other “budgetary duct tape” used by Pawlenty in his last year in office, according to the Minnesota Taxpayers Association, includes delaying $152 million in tax refunds. All told, when Pawlenty left office there was a projected $6.2 billion budget shortfall, which Sosanie notes is “the largest in our state’s history and the fourth largest among all states as a percentage of our state budget.” (Federal aid and measures taken by Dayton have slashed the deficit to $5 billion, which is the amount that the current shutdown fight is over.)