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GOP Phase 1 Budget Fix Has Familiar Ring

ST. PAUL, Minn. (AP) -- Minnesota local governments, colleges and recipients of social service grants bear the brunt of the first installment of the Legislature's state budget fix, which leaders of new Republican majorities outlined Tuesday.

The plan copies some temporary spending cuts made under former GOP Gov. Tim Pawlenty and makes the reductions permanent. Republicans said they hope to save at least $1 billion, about one-sixth of the projected deficit for the next two years.

Their goal is to send the bill to Democratic Gov. Mark Dayton before Valentine's Day. In a statement, Dayton objected to the proposal, saying he won't agree to "piecemeal cuts and partial solutions." He is due to issue his budget recommendations on Feb. 15.

Part of the GOP's fix depends on capturing $200 million from state agencies by blocking nonessential spending before the end of this fiscal year in June. Those cuts aren't detailed, and the GOP leaders acknowledged that was a "soft" savings target.

The Pawlenty-enacted cuts were supposed to blink off, but this plan would prevent that.

The move would cost city and county government $460 million and public universities $185 million. Tens of millions of dollars in grants for social services programs affecting children, the disabled and other low-income residents would go away. Another $105 million would come out of property tax refunds that thousands of renters share in.

Senate Finance Chairwoman Claire Robling, R-Jordan, said bipartisan votes that the cuts received last year when Democrats were in charge should have served notice to aid recipients that they could occur again.

"Most of them are expecting these to be continued. It's no surprise to them and should not be a surprise to them when we currently have a projected budget deficit of $6.2 billion," Robling said.

Pawlenty tried to make the cuts using executive authority but he was blocked by the courts. Senate Minority Leader Tom Bakk, DFL-Cook, said last year's votes to ratify them were part of a negotiated agreement and the cuts were intentionally temporary.

Still, some of those most affected were anticipating Monday's news.

At the University of Minnesota, school officials purposely kept the nearly $90 million at stake from the operating budget, said chief financial officer Richard Pfutzenreuter. He said the new cuts would dash university hopes of getting extra financial aid to students, beefing up core programs and hiring faculty for positions that had been left vacant.

"We had aspirations to spend that money, but we weren't foolish enough to go and spend it as if we had it," Pfutzenreuter said, adding that greater worry surrounds the possibility for another round of cuts before Minnesota's budget is balanced. "This one doesn't hurt as much as I suspect the next one will."

City leaders offered dire predictions.

"This proposal could not have come at a worse time as cities have already cut services to the bone, and many have been forced to raise property taxes as well in the wake of previous aid cuts over the past two years," said League of Minnesota Cities executive director Jim Miller.

State revenue officials estimate that every dollar cut from local aid programs results in a 67 cent increase in property taxes. Because not every local government gets state assistance and tax hikes are decided by city councils and county boards, the impact won't be uniform across the state.

The $200 million in undefined state agency cuts are meant to head off what House Ways and Means Chairwoman Mary Liz Holberg called "Christmas in June." She said some agencies take a use-it-or-lose-it approach to spending by rushing to upgrade computers or make other snap purchases toward the end of the budget year.

"Basically, it's taking a look under all the couch cushions, if you will, and looking for the extra dollars sitting in any accounts," Holberg said of the new savings push.

(© Copyright 2011 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed.)

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