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Budget deal leaves deficit for next Legislature

ST. PAUL — Failure by lawmakers and the governor to reach a budget deal would have left the state faced with the prospect of being unable to pay its bills.

"The state would have been in a very precarious situation," said Republican Gov. Tim Pawlenty.

Chief among the concerns is the state's cash flow. If individuals affected by the governor's unallotments decided to go to court to get the funding reinstated, the state would run out of cash that day. That would open the door to a government shutdown.

Even with the deal lawmakers approved today, the state’s financial woes are far from over. When lawmakers return to the Capitol next year they will face more than a $5 billion budget deficit.

Another key factor appeared to be the looming election.


Democrats told the governor they did not want a special session. House Speaker Margaret Anderson Kelliher is the DFL-endorsed candidate for governor and faces a tough primary challenge. Also running for governor is Republican-endorsed Rep. Tom Emmer of Delano. He's been an outspoken critic of the federal health care bill, and his opposition to the Medical Assistance expansion will likely be a key piece of his campaign.

Some area Democrats were frustrated that Republicans insisted on blocking the Medical Assistance expansion. On Thursday, the governor said he was open to the expansion. But after House and Senate Republicans voiced opposition, Pawlenty said Friday the idea was "problematic."

"The governor is letting Republican House members decide. He is open to something, but if they are not, it’s off the table. So they have to take responsibility for the consequences," said Rep. Tina Liebling, DFL-Rochester.

But Republicans say their opposition is based on principles. They say the expansion would bring "Obamacare" to the state and lead to other problems.

"This side of the aisle is not going to support implementing Obamacare," said Rep. Greg Davids, R-Preston. "I think there is a pretty good chance after the November elections Obamacare will be defeated, and we don’t want to go down that road at all."

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