by T.W. Budig
ECM Capitol reporter

Gov. Tim Pawlenty looks to trimming the state budget as a remedy for the $935 million budget deficit projected for this spending cycle.

Pawlenty called the deficit - the exact number being released Thursday (Feb. 28) - "serious but solvable."

"Nobody should be asking for more at this point," said Pawlenty of additional demands on the state budget.

The governor proposed "some" use of state budget reserves along with budget cuts to backfill the deficit hole.

Education could see cuts

Pawlenty indicated that he did not intend to cut K-12 funding, but added the Department of Education could receive budget cuts.

Pawlenty already placed a partial freeze on state hiring, but indicated he did not foresee state employee layoffs as necessary in dealing with the budget deficit.

The administration budget proposal would be out next week, Pawlenty indicated.

Although giving conditional support for closing perceived loopholes in laws pertaining to corporations with offshore assets - perhaps $100 million can be captured, he explained - Pawlenty said tax increases is not the answer to the state budget deficit.

Democrats indicated they would wait for the governor's budget proposal - House Majority Leader Tony Sertich, DFL-Chisholm, spoke of blending ideas from the governor and Legislature together.

Democrats did not rule proposing tax increases to deal with the budget shortfall.

Long-term investments

House Speaker Margaret Anderson Kelliher, DFL-Minneapolis, with House Majority Leader Tony Sertich at her side, spoke of the need for long-term investments by the state to foster fiscal health in the future. "It's not clear to me the governor is on that page yet," said Kelliher.

Democrats, too, look to closing perceived corporate loopholes dealing with offshore assets.

Both sides indicated some disagreement on the size of the bonding bill - at one apparently set at $965 million in general obligation bonding - the governor now suggesting the budget deficit news has lowered the prescribed amount to $825 million.

(Photos by T.W. Budig, ECM Capitol Reporter)