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T-Paw and the Minnesota Budget
The controversy over his last budget as governor


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Katrina Trinko

Is it Tim Pawlenty’s fault that Minnesota is facing a $5 billion deficit?

If you listen to former Minnesota senator Walter Mondale, or the state’s former Republican governor, Arne Carlson, that’s the case. “He left basically the mess that we see — the huge deficits. He shifted these issues into the future so that he wouldn’t be around,” Mondale told Politico. Carlson gave Politico a similarly harsh quote: “Of course it’s his fault. You can’t blame the new governor or legislature. They inherited this. He would be the classic example of kicking the can to the future.” 

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With Minnesota’s government currently shut down over a stalemate about how to close the budget gap (Democrats want tax hikes; Republicans don’t), those are fighting words. In a statement Tuesday, Pawlenty rejoined, “The last budget on my watch ended last week with a positive balance. The projected deficit for the upcoming two years is based on large projected spending increases, which I never would have allowed as governor. Minnesota government is shut down because of Democrats’ insistence on Obama-esque solutions to increase spending and raise taxes.”

Pawlenty also pointed out that “Mondale ran for president against Ronald Reagan on a platform that called for higher taxes” and that Carlson, despite his Republican history, “supported John Kerry, Barack Obama, and other Democrats.” 

“It should surprise no one that they both support more spending and higher taxes in Minnesota,” Pawlenty added. 

Most of the criticism of Pawlenty targets his decision to rely on two one-time fixes to balance the 2009–2011 biennium budget. Pawlenty accepted $2.3 billion in stimulus money and delayed paying $1.9 billion to state schools to help close a $4.8 billion budget gap in 2009.

Peter Nelson, a policy fellow at the conservative Minnesota think tank Center of the American Experiment, defends Pawlenty’s decision to use the school funds. “Historically, that has been used in times of budget crisises,” he says. “It’s always been just another budget tool. Democrats have used it. Republicans have used it.” 

“It’s really almost used as a budget reserve account, and it’s allowed them to not have as large of a budget reserve account. So I wouldn’t say that shift is part of our current problem today,” Nelson adds, noting that this legislature can choose to not pay back the schools entirely. 

In 2009, Pawlenty faced Democratic majorities in both the state house and senate. They wanted to raise taxes, but Pawlenty looked to other ways to balance the state budget. 

In addition to the stimulus money, Pawlenty used a process called unallotment — which allows the governor to cut spending unilaterally — to make $736 million in cuts. That decision did not endear him to state Democrats. One Democratic senator said that Pawlenty was the “schoolyard bully picking on the sickest, most vulnerable people in our state,” according to the Minneapolis Star-Tribune. Another Democratic senator accused Pawlenty of “going after seniors, renters, the poor, disabled, and mentally ill to pay for the budget deficit.” 

In 2010, the state supreme court ruled that Pawlenty didn’t have the authority to use unallotment to defer the school payments and make the cuts, meaning Minnesota’s expected shortfall that year skyrocketed from $500 million to $3 billion. Again, Pawlenty vetoed a tax increase the legislature passed. “Opposing tax increases is Pawlenty’s signature issue,” the St. Paul Pioneer Press noted. Ultimately, the state legislature ratified the delayed payments and many of the cuts, leaving the budget in the black.

Nelson acknowledges that Pawlenty himself probably wasn’t ecstatic over how he balanced his last budget. “He did have limited ability to fundamentally transform programs in the way he would have wanted to, I’m sure,” Nelson says, noting that the Democratic majorities in both chambers meant Pawlenty “didn’t have much control.”

But Nelson also points out that Pawlenty’s budget actions ensured that tax hikes were avoided. 

“To the extent you could argue that he’s responsible for [the current budget deficit],” Nelson says, “he held the line on taxes.”

— Katrina Trinko is an NRO reporter.



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