Pawlenty warns lawmakers he will veto tax hikes

Pawlenty traveled to St. Cloud Wednesday to deliver his annual State of the State address. The Republican governor warned legislators that'll he'll veto any bill that raise taxes. Pawlenty also wants to look at ways to improve the state's tax system and grow new jobs.

Pawlenty said 2007 had a decade worth of disasters, including forest fires, floods and the 35W bridge collapse. Now the state is dealing with a budget shortfall, projected at $373 million and growing.

During his sixth State of the State address, Pawlenty said now is not the time to raise taxes.

"As we tackle the deficit, we must remember that Minnesota's hardworking families are already squeezed enough," he said. "They're paying more for gas, food and health care. The last thing they need is government rummaging around in their pockets looking for more. Government must learn to live within its means. We should not add to the burden on Minnesota families by raising their taxes."

Pawlenty specifically warned legislators that he will use his veto pen as necessary to restrain taxes and spending. He proposed the creation of a tax reform commission to look for ways to improve the state's job climate.

"Our current tax system reflects the economy and demographics of the 1960s," he said. "It's outdated and needs to be fixed."

Pawlenty listed several of his recent proposals to improve health care, education and renewable energy production. He also highlighted another potential clash with the DFL-controlled House and Senate over transportation funding.

The Republican governor vetoed last year's transportation bill because he said it was too heavy with tax hikes. A similarly hefty bill could land on his desk in the coming weeks. But Pawlenty indicated he's looking to make a deal.

"Strong differences of opinion exist regarding transportation funding," he said. "But we all agree on one thing, we cannot continue the stalemate that has existed for three decades. I remain hopeful we can overcome the politics and rhetoric of this debate and pass a bipartisan transportation bill this session."

While Pawlenty moved the State of State address from its traditional setting at the state Capitol to St. Cloud, the speech contained no proposals specific to the central Minnesota city. In fact the governor rejected a $15 million request from St. Cloud in his proposed bonding bill. The city wanted to use the money to expand their convention center where the governor spoke.

Republicans were quick to praise the governor's speech, and its message of government living within its means.

Senate Minority Leader Dave Senjem liked Pawlenty's idea for a tax reform commission. Senjem agrees that current tax polices are discouraging economic growth.

"If you expect to have a growing economy in Minnesota you've got to look and ask why we're 44th in the country in corporate tax rate," he said. "What corporation would want to stay here with that kind of a tax rate?"

Democrats offered a critical review of the speech. House Speaker Margaret Anderson Kelliher said the governor offered few specifics on dealing with the state's struggling economy.

"It was disappointing that the governor did not address more straight on how we can produce more jobs in the state and do our part together to reverse the 23,000 lost jobs in the state in the last six months and the high unemployment rate," she said. "I think that was a real disappointment today."

Kelliher said DFL lawmakers will work to boost the economy by passing a transportation bill and state bonding bill that will create thousands of construction jobs. Kelliher predicted the Legislature will send Pawlenty a transportation bill with the bipartisan support he wants to see.

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