Pawlenty State of State: Aiming for bold, on a budget

By Patricia Lopez/Dane Smith

Star Tribune

      ROCHESTER -- In his third State of the State address, Gov. Tim Pawlenty on Tuesday declared Minnesota's condition to be "good, but not good enough."

      Facing a third year of projected budget deficits, Pawlenty reiterated his determination to hold the line on taxes but said the state still must chart bold initiatives to move forward on education, renewable fuels and health care reform. And he declared again his intention to see state government get a share of gambling profits.

      To be a global competitor, he said, Minnesota must double the amount of ethanol in its gasoline and become "the Saudi Arabia of renewable fuels."

      To regain its edge in education, the state should allow high school students who take college prep classes to pass a test and instantly gain college credits, he said.

      Additionally, Pawlenty said higher-education funding should be retooled so that more money goes to students rather than institutions, and he suggested that the state turn the University Center Rochester into a full-fledged four-year university.

DFL reaction

      DFL leaders panned the governor's speech as contradictory on some points and generally lacking vision.

      Senate Majority Leader Dean Johnson, DFL-Willmar, said that the speech lacked "that old Tim Pawlenty spirit" and that his proposed initiatives could add $500 million in spending while offering few new sources of revenue.

      Much of the speech focused heavily on Rochester, a growing city of 85,000 and a traditionally Republican stronghold where the House GOP lost two seats in the November elections. Pawlenty repeatedly praised the "Rochester model" of global competition.

      He spoke at the Mayo Clinic Superior Drive Support Center, a blood and tissue lab that analyzes samples from around the world. The lab, using the state's Job Opportunity Building Zones (JOBZ) tax-breaks program, replaced another business in that building whose jobs were outsourced to Toronto, according to state Rep. Fran Bradley, R-Rochester.

      Pawlenty said his budget proposal will include $20 million to fund genomics research being undertaken through a partnership between Mayo and the University of Minnesota.

      The partnership "will be an awesome force in the world's medical research marketplace," he said, and "will leverage the power of these two great institutions beyond what they could accomplish individually."

      The money for the proposal will be the result of another public-private partnership, Pawlenty said. While three-quarters of the money would come from the state, he said, the health insurer Medica has already pledged $5 million as a "legacy gift," and other partners are to come.

      In another plum for Rochester, Pawlenty said he would not sign a bonding bill that did not include funding for a Mayo-University of Minnesota Genomics Lab he proposed last year.

      Clearly annoyed at the lack of progress on his attempts to extract a share of gambling revenue from the state's Indian casinos, Pawlenty hinted broadly that he may soon have an agreement that would give several of the state's largest -- and poorest -- northern tribes a new, metro-area casino in return for state payments.

      "My hope was that tribes with large casino gaming interests would make a fair payment to the state in exchange for being granted a monopoly and other benefits," Pawlenty said. "It appears they're not interested in such an agreement."

      An announcement would be coming soon, he said, adding that "we are pleased with our discussions" with the Leech Lake, White Earth and Red Lake bands, which make up 85 percent of the state's Indian population.

      Previously the administration had indicated that such an agreement might yield nearly $100 million a year for the state. Pawlenty had hoped to get $350 million from the tribes that run the state's most successful casinos.

      John McCarthy, executive director of the Minnesota Indian Gaming Association, which represents those nine tribes, said that Pawlenty "should stop making Indian tribes the scapegoat for the state's budget problems and start exercising the responsible leadership Minnesotans expect from their elected officials."

Spending restraints

      Another potentially controversial proposal was Pawlenty's pitch for "turbocharged Truth-in-Taxation" that could throw some local levy increases to an automatic referendum.

      Pawlenty would have the annual Truth in Taxation forms come with three postcards -- one each for school districts, cities or townships, and counties. These "Taxpayer Satisfaction Surveys" would allow taxpayers to mail in a "no" vote if they thought a proposed levy was too high. Enough postcards would trigger a referendum, he said. He offered no details as to how such a trigger would work.

      House Minority Leader Matt Entenza, DFL-St. Paul, said Pawlenty sounded a contradictory note by calling for a "turbocharged" process for rejecting government tax increases when only last week he had suggested current state laws requiring voter approval be modified so that some school districts be allowed to raise more revenue.

      "The governor can't have it both ways," Entenza said, noting that property taxes in recent years have risen briskly because of state cuts in local aid. "He's raising taxes with his left hand, and with his right hand he's saying, 'Don't pay attention to what I'm doing.' "

      David Strom, president of the Taxpayers League of Minnesota, called the surveys "a terrific way to restore the bond of trust between local elected officials and their constituents."

      Pawlenty again signaled that he wants to rein in state health care costs, saying that "our government welfare health care system is out of control." While he gave no details, he said Minnesota's health care offerings should be "comparable to surrounding states and more focused on those with the fewest resources and the greatest needs."

      That would seem to spell trouble for the state's General Assistance Medical Care, the $250 million-a-year program that serves poor, single, childless adults. Few states offer care to such populations, other than through Medicaid.

Staff writer Mark Brunswick contributed to this report.