Mar 07 Fiscal Sanity Spotted, Pawelnty Fires Back

Pawlenty has released his proposal to solve the budget deficit and it appears the Guv is finally starting to understand the concept of fiscal responsibility, dare I say fiscal sanity.

The Governor’s budget solution reduces the growth in state spending by $341 million, uses $250 million of the $653 million budget reserve, and uses $250 million from the surplus in the Health Care Access Fund to maintain health care programs and eligibility for the disadvantaged.

Highlights of the Governor’s budget plan include:

• No new taxes

• Statewide sales tax cut of 1/8th percent

• No reductions in funding for K-12 education

• No reductions in funding for local government aid

• New initiatives including Strategic Entrepreneurial Economic Development (SEED), military and veterans support, and K-12 education reforms

• Reductions to most state agency budgets of 4% and other targeted spending reductions

Overall, approximately 40% of the budget plan comes from spending cuts and additional revenues, 35% from balances or surpluses in non-general fund accounts and 25% from the state budget reserve. Even with the proposed spending reductions, the FY 2008-09 budget would increase by 9.2% over the previous two-year budget.

“Minnesotans are concerned about the economy, rising costs and government’s seemingly endless demands on their wallets,” Governor Pawlenty said. “This plan balances our budget without adding to the burden facing Minnesotans. We’ll tackle this deficit by holding government accountable, tightening our belts and using available resources, not by raising taxes.”

As part of the proposal, Governor Pawlenty called for a 1/8th percent cut in the statewide sales tax to partially offset the impact of recent tax increases passed by the DFL-controlled legislature and provide some additional economic stimulus on the state level.

There's more in the release, but I just did a little happy dance that he is finally going where he should have 3 years ago. A sales tax cut to offset the DFL and liberal (R)epublican's tax increase. Of course it is not big enough, but I still think Pawlenty may have had enough negotiating and trying to expect bi-partisanship out of the Democrats.

He is not promoting stimulating the economy by putting the state or nation further into debt, but rather let us keep more of our own money. Tax cuts! By golly, I think he may be catching on.