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Don Davis, Published July 01 2009

Economist says Minnesota budget cuts could cost 4,700 jobs

ST. PAUL – Gov. Tim Pawlenty’s decision to make unilateral budget cuts could cost up to 4,700 jobs across Minnesota, the state economist told legislative leaders Tuesday.

In a confrontational meeting, House Speaker Margaret Anderson Kelliher, DFL-Minneapolis, disputed some of those numbers. She told State Economist Tom Stinson that he undershot the number of jobs that school districts will be forced to cut, perhaps by several hundred.

Stinson said up to 600 of the 4,700 job losses would come from schools. But Kelliher pointed out that Twin Cities school districts themselves, not counting any other districts in the state, estimate they would need to eliminate 825 jobs.

Stinson said up to 1,970 local government jobs and 1,630 state jobs could be lost due to the cuts. Another 500 private jobs would disappear, he added.

The economist did not estimate indirect job loses, such as when a firm loses state business and is forced to lay off employees.

House Majority Leader Tony Sertich said Stinson’s numbers “were a floor and not a ceiling” to the number of job losses.

Pawlenty today plans to formally order that the state delay making some payments to school districts, part of a $2.7 billion budget-balancing action the Republican governor is taking.

Those delayed payments would force schools to borrow money, which Stinson said could lead to layoffs.

Commissioner Tom Hanson of Minnesota Management and Budget, a Pawlenty appointee, said the Legislature only passed a balanced budget in the last eight minutes of this year’s legislative session. That is when lawmakers approved a tax increase that Pawlenty vetoed.

When the tax increase failed, the budget had a

$2.7 billion deficit that Pawlenty opted to plug by making cuts on his own instead of calling lawmakers back into special session.

Kelliher said Pawlenty made his decision to unallot well before the session ended. She said he was disengaged, not interested in negotiating a budget deal with Democrats.

“It is absolutely essential that the Legislature curbs the power of the executive branch,” she said, adding that bills will be considered in 2010 to limit a governor’s unallotment power.


Davis works for Forum Communications Co., which owns The Forum. He can be reached at (651) 290-0707 or ddavis@forumcomm.com