Bob Dylan: Pitch manby Mike Mulcahy, Minnesota Public Radio
(AP) Taking a cue from Donald Trump, Senate Democrats came out with a budget plan Friday that would have a few dozen state agency managers hearing "You're fired!" Cuts to department budgets and a requirement that agencies have only a single deputy commissioner - which would dismiss 38 assistant commissioners making at least $72,000 - are a key part of their strategy for ridding the state of a projected $160 million deficit.
"It's now time to put state agencies on a Slim Fast diet, especially at the upper management levels," said Senate Majority Leader Dean Johnson, DFL-Willmar.
The plan, which is scheduled for a vote Wednesday, follows Gov. Tim Pawlenty's lead in seeking sales tax payments on leased cars upfront, but diverges from Republican proposals in most ways.
One of the largest plugs for the budget hole would come from doing away with some corporate tax exemptions commonly called loopholes. For instance, the DFL senators would demand that companies that now avoid state taxes by qualifying as foreign companies actually have at least $2 million worth of property and $1 million in payroll costs outside the United States.
In all, the tax changes would bring in $109 million next budget year, which begins in July. The corporate tax portion accounts for $58 million of that.
Senate Minority Leader Dick Day, R-Owatonna, attacked the plan as rife with tax increases.
"The truth is, Democrats are trying to have it both ways," he said. "They talk about wanting to create jobs but they raise taxes on business, the job creators."
House Republicans also seized on the tax portion, although they wouldn't declare it dead on arrival.
"You've got a proposal that's going to increase corporate taxes by 10 percent and we're worried that's going to kill the job providers," said House Majority Leader Erik Paulsen, R-Eden Prairie.
DFL leaders said their focus on trimming the top level of government is an attempt to spread the pain, something they said wasn't done last year when legislators were tackling a $4.5 billion deficit.
Including the restriction on non-unionized managers, the DFL proposal requires most agencies to cut 5 percent from their operating budgets. Pawlenty had called for a 3 percent cut.
The plan avoids Pawlenty's call for taking roughly $40 million from health and welfare programs, accomplished largely by cutting payments to hospitals, pharmacists and nursing homes. On that score, the Senate is aligned with a House Republican-crafted budget.
The Senate would tap $40 million from a fund that pays for Minnesota's subsidized insurance program, Minnesotacare, but they characterized it as a loan. Pawlenty and the House GOP also target that account.
The Senate proposal actually makes $190 million worth of cuts and shifts, which gives them $30 million to pay for new priorities.
Like the House, they would enact longer sentences for predatory sex offenders. But they also put more into victims support programs and those that supervise sex offenders upon their release.
The House plan would avoid most of those cuts in payments to health care providers and the Senate avoids them altogether.
And the Senate would transfer just over half of what the House and governor are proposing from a fund that pays for Minnesota's subsidized insurance program, Minnesotacare, to the state's general fund. That money ultimately comes from taxes on health care services.
Unlike the House budget, the Senate proposal doesn't count on proceeds from expanded gambling. The House has given its approval to add slot machines at Canterbury Park racetrack in Shakopee, which would create the state's first non-tribal casino.
Johnson said casino revenues are too volatile to build into a budget.
It doesn't end the discussion, however. Senate Tax Chairman Larry Pogemiller, DFL-Minneapolis, said he would be willing to discuss the casino plans separate from the budget.
Once the Senate passes its plan, negotiators from the two chambers will have a month to reach a compromise. There is no requirement that a budget fix be passed this year, reducing the incentive for compromise.
Highlights of the DFL Senate budget plan:
-$57.9 million from changing the way a handful of taxes are handled for highly paid executives and foreign operating corporations
-$39.4 million from a fund that pays for Minnesota's subsidized insurance program, Minnesotacare, to the state's general fund. That money ultimately comes from taxes on health care services.
-$35.6 million from putting an up-front sales tax on car rentals
-$30.2 million from a 5 percent cut to state agency operating budgets
-$12 million from agency surpluses would be put back into the general treasury
-$10.5 million from requiring the wholesaler, rather than the retailer to pay the state sales tax on cigarettes
-$5 million from other revenue changes
*The Senate plan would allow for about $30.6 million in new spending.