Council quizzes lawmakers

By KURT NESBITT

Journal Staff Writer

NEW ULM--State legislators met with New Ulm city officials Friday to answer questions about the state budget and how it might affect the city.

State Sen. Dennis Frederickson and State Rep. Brad Finstad, Republicans from New Ulm, came fresh from a week in St. Paul, where the Senate recently passed its budget plan despite attacks from the GOP and Gov. Tim Pawlenty.

The state is facing a $356 million deficit for 2003 and both Finstad and Frederickson said they see every indication that nothing will go untouched by cuts.

"I wish we were in a situation where we could talk about how to split up the surplus," said mayor Joel Albrecht. "But we're trying to get answers on how deep the axe is going."

Councilors and city department heads asked questions about a wide range of topics. Cuts to local government aid was one focus of the conversation. City officials also asked several questions about how the cuts may affect city taxes this year.

The Senate's recently-passed budget bill represents $374 million in cuts and shifts. Frederickson pointed out that the plans are not final yet as the bill is expected to go into conference committees this coming week. The Senate left all ethanol subsidies except ones to the Gopher State plant in St. Paul, which representatives cut for "local political reasons," Frederickson said.

It did cut $76 million in transportation funding, $4.7 million in K-12 education, $30 million from higher education and $63 million from health and human services and corrections, said the senator.

"The governor's plan is coming out in the next few weeks," Frederickson said. "Virtually everything will be affected."

That said, however, state revenue projections are expected to go up by 2.6 percent this year and are expected to improve over the next three years. He said the next forecast is due in March and that the Senate will likely base its next decision on that report.

"It's clear to all of us that we need to take action," he said.

Finstad said the House's version of the budget bill differs from the Senate's. Finstad said the House plan makes $468 million in cuts but differs in ethanol subsidy cuts in that the St. Paul plant was also left untouched.

Finstad, a freshman and member of the House Agriculture and Rural Development Finance Committee, said, "We didn't think it was fair to single out one particular plant. This is a plant that busy 5 million bushels of corn from Dakota County farmers."

The House is eyeing human services as the next big area for its next phase of budget cuts and is particularly looking at many of its lesser-used grants, said Finstad. The House also went after the reserves of both the University of Minnesota and MnSCU in its higher education cuts," he said.

But most importantly, he said, local government aid is on the House chopping block for the next phase, as state representatives are largely in favor of looking at it, although it is one of the most contentious issues within the House Republican caucus.

Both legislators said they have not taken Pawlenty's no new taxes pledge and said his plans will not affect individual income taxes, corporate taxes and sales taxes but could affect property taxes.

"Would you both consider raising taxes as a solution to the crisis?," asked councilor Clark Tuttle, an assistant Brown County attorney who represents the city's first ward.

"Not yet," Frederickson said. "But we'll see."

Frederickson later said in response to a question from city manager Brian Grametz that one round of cuts made to the base of the state government would help balance the budget for the remainder of the two-year biennium, but cuts to state grants would not last over the entire fiscal cycle.