'Rainy Day Fund' aids state shortfall

By FRITZ BUSCH

Journal Staff Writer

SLEEPY EYE -- Minnesota is better prepared for it's $1.95 billion budget shortfall than any other state but one, District 23 Senator Dennis Frederickson (R-New Ulm) told farmers and senior citizens here Friday.

Speaking at an agriculture issues forum at the Brown County Office building, Frederickson said the State of Minnesota has $1 billion in its "rainy day" fund.

"We are better prepared for budget problems than any other state except Alaska which has lots of oil royalty money," Frederickson said. "We could see the economy slowing down last summer, but nobody thought it would slow down as much as it has."

Frederickson said the state budget deficit can be made up using reserve funds, payment shifting, tax and fee increases and budget cuts. He doesn't foresee any major tax changes coming out of the next legislative session but he expects many expenditures will be held down, at least until the next economic forecast.

Items that are not expected to be cut include the Conservation Reserve Enhancement Program in the Minnesota River Watershed is going well with 93,000 acres enrolled. Project goal is 100,000 acres of highly-erodable land on flood plains and water courses.

Farmers asked about the fate of the mandated two percent soy-based bio diesel program that was defeated in the last session. They said it was needed to build bio diesel plants in the state

"I supported it and there is evidence that it works," Frederickson said. "It was the mandated part of it that bothered some groups like petroleum companies and engine manufacturers."

Sylvester Hauser of Sleepy Eye complained about the recently bulging state budget that grew from $13 billion a decade ago to $27 billion.

"Four years ago, it was 20 percent less," Hauser said. "That's a big increase compared to inflation."

Frederickson said the biggest state budget increases were for K-12 education and health and human services. He pointed out that local real estate taxes fell because state money is now used for general education funding.

"Many school districts asked for referendum money because they will get less money due to declining enrollment," Frederickson said. "We're educating a wider variety of students now and it's costing more money. Special Education costs a lot of money."

District 23A Rep. James Clark (R-New Ulm), said Minnesota is the only state in the country that passed permanent tax cuts three straight years.

Clark said the 2002 Legislature will look closely at state agency budgets.

Despite the state shortfall, Clark forecasts good bonding opportunities this year with a $400-$600 million bonding bill.

Clark said the House reaction to the Sept. 11 terrorist attack will include tougher trespassing laws at utility sites, stiffer penalties for terrorist hoaxes and acts.

He hailed Crimnet, the new $20 million statewide criminal information network. A national criminal information system is also being considered, Clark said.

Transportation funding prospects also appear bright with $1 billion or more in the pot, said Clark, who is the vice chairs the transportation committee. He sees good chances for 10-ton county roads.

Clark called redistricting an "ugly" issue.

"We just don't have the votes," Clark said. "We'll be losing rural legislators, giving us less voices in St. Paul."

Alma Romberg of Sleepy Eye said she was interested in a better prescription drug program for senior citizens.

Clark said the state Health Department was directed to reduce the size of its 18-page application, become accessible at the county level and raise accessibility income and asset levels.

"Some of my pills cost $2 each. Programs are needed for families too," Romberg said.

Farmers also complained about the North American Free Trade Agreement (NAFTA).

"It's a bunch of hooey for us," a farmer said. "It's still Cargill. They don't give a crap about us. They're down in South America with those huge ships."

Frederickson said European markets "fence out" grain with trade barriers, the GMO issue and higher farm subsidies.

Hauser also took a shot at how state pollution laws affect farmers.

Hauser said small producers are discriminated against by big corporations.

"This country stands for fair treatment for all and we aren't getting it," Hauser said.

Randy Krzmarzick of Sleepy Eye said it may take government involvement for small producers to get fair treatment.

"If a farm title has Inc. or Co. at the end of it, it isn't a family farm," said another farmer.