BAXTER - Gov. Tim Pawlenty Thursday stressed the importance of curbing state spending and not raising taxes as Minnesota grapples with projections of a $5 billion budget deficit and what he termed as the most severe economic crisis since World War II.
The governor addressed a Brainerd Lakes Chamber luncheon, toured Silent Power Inc., a Baxter renewable energy firm, and talked with members of the Brainerd Dispatch's editorial board.
Numbers for the state budget are in a state of flux since a more up-to-date economic forecast is expected soon and the details of the federal stimulus program are just coming to light.
"We have a global, national and state economic crisis," Pawlenty said, adding that Minnesotans have always faced challenge and that we should be both pragmatic and hopeful.
Slowing down state spending, in particular health care costs, which are threatening to suffocate the rest of the budget, is a must.
Gov. Tim Pawlenty discussed the state's budget shortfall Thursday at a Brainerd Lakes Chamber luncheon at the Lodge in Baxter. Lawmakers will conduct a town hall meeting on the same topic Friday at the Washington Educational Services Building in Brainerd. Brainerd Dispatch/Steve Kohls» Purchase reprints of this photo.
"It's important to live within your means," he told the chamber members.
Since 1960 the average annual increase in state spending has been 19 percent. Pawlenty said Gov. Arne Carlson and Gov. Jesse Ventura brought that figure down to 12 percent. Currently, the increase under Pawlenty has been about 9 percent. The governor would like to reduce state spending by 2.2 percent this year.
Reining in spending will position Minnesota to be competitive in the future, he said. Not everybody, he reminded Democrats, can work for the government.
"We need to make Minnesota a more job-friendly and business-friendly state," he said. "You can't be pro-jobs and anti-business. The main quality-of-life pathways for most Minnesotans are a job."
Education is a key component of encouraging businesses, Pawlenty said.
Gesturing as if he were a batter, Gov. Tim Pawlenty on Thursday entertained a group that visited Silent Power Inc., a renewable energy business in Baxter, with a story. He said he expected the federal stimulus program to provide many opportunities for renewable energy firms. Brainerd Dispatch/Steve Kohls» Purchase reprints of this photo.
If he were to pronounce the changes he wanted as if they were commandments his education critics would advise him "thou shalt go jump in Gull Lake," Pawlenty said. He said a governor is only empowered to nudge educators gently in the direction he would like.
"God forbid, we can't have the teachers' unions mad at us," he said.
Claiming the educational system is 40 to 50 years out of date, he said the core mission should be to see that students are learning and learning at a reasonable rate. The seniority-based system of compensation doesn't relate to that mission, he said.
"The world has changed," Pawlenty said. "It doesn't work like that."
Responding to a question from Alan Gunsbury, a longtime Gull Lake resort and restaurant owner, Pawlenty said high schools, in particular, have major problems. He said they have become academic holding patterns for many students with about half of high school students academically plateauing during those crucial years.
Escalating health care costs were identified by Pawlenty as a big reason for the rise in state spending. Health care costs, as a percentage of the state budget, he said, are in danger of one day consuming the entire budget.
"It's a runaway train," Pawlenty said.
If you go
What: Minnesota Legislature's town hall meeting.
Why: Offer ideas on how to address the state's projected multibillion budget deficit.
When: 10:30 a.m. Friday.
Where: Washington Educational Services Building, 804 Oak St., Brainerd.
Who: Democratic and Republican legislators are scheduled to attend.
Health care programs may be helped by federal stimulus programs, Pawlenty said, although in some cases that one-time money may come with restrictions that prevent any changes to the programs.
"I'm very concerned about that," he said.
He said that if he simply told audience members to buy a television set and send him the bill, very few people would purchase a small, black and white television. They likely would buy the most expensive models, he said. Similarly, the governor said guidelines need to be set when health care choices are made also.
"We have to begin to demand and insist consumers have information on cost and quality," he said.
Health care providers, he suggested, should be placed into tiers so that if a consumer chooses one with high costs/poor quality they will be obliged to pay more out of pocket costs.
He said while he favored a federal stimulus package the one that was enacted was not the one he would have crafted.
Later in an interview at the Brainerd Dispatch, he again voiced concern with the stimulus bill.
"This thing has turned into a meandering buffet of spending," he said.
He rejected the idea of raising taxes in this tough economy. Minnesota's business taxes and personal income taxes, he said, are among the highest in the nation.
In a question-and-answer period at the luncheon, Pawlenty recalled that his 2005 plan for a Twin Cities casino that would be run by the state and interested Indian tribes was met with considerable criticism and was stymied.
"I got my rear kicked," he said. "I'm not going to go down that road again."
When an audience member asked about the state possibly suspending prevailing wage requirements Pawlenty said he would like to see actual data used to compile those requirements rather than using surveys that could be skewed. While he would favor such a change, he said it has no support in the Legislature because many lawmakers are reluctant to oppose unions on the issue.
"You don't cross unions or you're toast," he said.
At both the luncheon and at his tour of Silent Power Pawlenty said the U.S. needed to get off its addiction to foreign oil. He told Silent Power officials and business representatives who work with them they're on the leading edge of change and that he was excited and proud of their accomplishments.
"Smart grid capabilities are critically important," he said.
Pawlenty, who earlier in his administration signed legislation that requires 25 percent of the state's electricity come from renewable energy by 2025, praised the bright and innovative people who were making this possible. He said he expected the federal stimulus program's energy proposals would provide many opportunities.
"Your success is our success," he said.
MIKE O'ROURKE may be reached at firstname.lastname@example.org or 855-5860.
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