Planning for a cash crunch - KTTC Rochester, Austin, Mason City News, Weather and Sports

by Jennifer Hoff

Planning for a cash crunch


ST. PAUL, MN (KTTC DT) -- Thursday, Minnesota's governor makes a radical move to balance the state's budget. This after the Supreme Court ruled his first attempt was unconstitutional.

The NewsCenter was at the Capitol when Governor Tim Pawlenty ordered his cabinet to plan for a "cash crunch". It includes the extreme possibility he could shut down parts of government - for the time being.

Pawlenty's scramble to create a balanced budget, while managing a cash crunch with the state's money, comes on the heels of a decision Wednesday in the Minnesota Supreme Court.

The justices ruled four to three that the Governor exceeded his authority, when he cut $5.3 million dollars from a nutrition program for seniors and the disabled, just one of many so-called "unallotments" totaling nearly three billion dollars.

Now the thought of other groups suing to get their unallotted funding back is sparking fear the deficit will plummet even deeper.

Sen. Mike Parry (R) Waseca, says, "There's going to have to be some drastic cuts, everything is on the table once again."

With 10 days left in the session, lawmakers on both sides are hopeful they can end this on time, but a frustrated governor is sticking to his guns.

Again and again Pawlenty has refused to go along with higher taxes. Now, he's issued an executive order asking cabinet members to identify core functions pertaining to what he called "life, health and safety of Minnesota citizens."

Gov. Pawlenty says, "We're planning to manage cash using any flexibility and any discretion to defer payments or obligations as a way to try to preserve as much cash as possible."

There is now a real question whether lawmakers can finish this legislative session on time.

Sen. Dan Sparks (DFL) Austin, says, "I think we have to roll up our sleeves and put our heads together, but 10 days in legislative time is plenty of time to get it done."

With only so many days left though and a massive multi-billion dollar budget deficit still looming over their heads, it's anyone guess as to how lawmakers and the governor might be able to resolve this never ending battle.

And around 5 p.m., the DFL-controlled House reportedly voted against enacting Governor Pawlenty's unallotment cuts.

That would have been a simple solution to this crisis, one that Pawlenty was pushing for.

Now both party's are with their backs against the wall and the clock is ticking.

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