Look for cuts, some gimmicks, but no tax increases in the two-year
state budget Gov. Tim Pawlenty will be presenting next Tuesday (Jan.
27)."We're able to balance the budget without them (tax increases), said Pawlenty on Thursday (Jan. 22).
Democrats want tax increases on the table and talk of leaving options open.
Minnesotans will see a state budget presented that is "aggressive and "takes on some risks in repositioning the state in terms of job creation, explained Pawlenty, speaking to a group of reporters.
by T.W. Budig
ECM Capitol reporter
Look for cuts, some gimmicks, but no tax increases in the two-year state budget Gov. Tim Pawlenty will be presenting next Tuesday (Jan. 27).
"We're able to balance the budget without them (tax increases), said Pawlenty on Thursday (Jan. 22).
Democrats want tax increases on the table and talk of leaving options open.
Minnesotans will see a state budget presented that is "aggressive and "takes on some risks in repositioning the state in terms of job creation, explained Pawlenty, speaking to a group of reporters.
Pawlenty pointed to his recent State of the State Address as a preview of what the proposed budget will contain.
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In addressing the business climate Pawlenty in his speech called for cutting the business tax rate in half over the next six years from 9.8 percent to 4.8 percent business tax credits, sales tax and capital gains exemptions, and other breaks.
The state is not where it should be in terms of job competitiveness, Pawlenty argued.
Beyond saying that his proposed budget will have state fees at historic lows, Pawlenty also indicated that in addition to budget cuts he will using payment shifts and other accounting steps to produce a balanced state budget.
"It's a mix of both, he said.
Pawlenty does not anticipate the budget picture to brighten anytime soon.
Indeed, he expects the state's February budget forecast to show it "worse by a significant margin.
The nation is "hemorrhaging jobs, said Pawlenty, and the negative job numbers could remain for a long time.
The governor expects the February update to show a deficit lingering in the current state spending cycle Pawlenty has already unallotted the existing budget once in trying to balance it.
Pawlenty expects "significant state budget help coming from Washington.
But while federal job creation programs can have a positive impact on the state budget long term, Pawlenty minimized their impact short term.
Pawlenty indicate support for a job creation proposal presented Thursday by House Republicans that would provide statewide a "tax holiday for five years from the business tax for new companies coming to Minnesota.
House Republicans curl around Rep. Kurt Zellers, R-Maple Grove, on Thursday (Jan. 22) as Zellers presented a job creation proposal that would have the business tax cut statewide for five years for new companies coming to Minnesota. Local lawmakers attending the press conference, left to right, are representatives Mary Kiffmeyer, of Big Lake, Peggy Scott, of Andover, Mark Buesgens, of Jordan, Zellers, and Tara Mack of Apple Valley.
The legislation is expected to be introduced next week.
"The bill gives nothing up, said Rep. Tom Emmer, R-Delano, of the tax break.
It's not revenue the state has now anyway, he argued.
Rep. Mary Kiffmeyer, R-Big Lake, argued that the proposal fills a gap in Pawlenty's Job Opportunity Building Zones (JOBZ) as it applies across the state while JOBZ does not.
"This is something that Sherburne County needs, said Kiffmeyer, saying such a law could help attract a company promising more than 1,000 jobs currently considering Sherburne County.
Pawlenty styled the Republican idea as a "mini-JOBZ, and indicated support.
"I would like the whole state a JOBZ if I could, he said.
But Pawlenty added that creating business inequities with such programs is an issue and needs to be weighed.
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