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Gov. Pawlenty ponders stimulus money offer
ST. PAUL, Minn. -- Governor Tim Pawlenty is weighing a decision that has implications for the state's bottom line and, quite possibly, his national political profile. The federal stimulus aid package that Congress approved last week will send roughly $260 million to Minnesota, but only if the governor okays it.
"By accepting this money, which will go into the cash flow account, it just gives the state a cushion," Rep. Erin Murphy, D - St. Paul told KARE Friday, "We don't have many cushions left. We're facing a $5 billion to $6 billion deficit."
Governor Pawlenty was campaigning for fellow Republicans in Oregon and Nevada Friday, but his spokesperson told KARE the governor was reviewing the aid package with an eye toward a September 24th deadline.
The only insight so far came August 10th, when Pawlenty reacted to Congress passing the legislation.
"The federal government should not deficit spend to bail out states and special interest groups," Pawlenty said, "Minnesota balanced its budget without raising taxes and without relying on more federal money. The federal government's reckless spending spree must come to an end."
Important Story Update: On September 7th, budget commissioner Tom Hanson informed lawmakers that the Pawlenty administration will apply for the $263 million in FMAP federal stimulus money. In a letter to U.S. Secretary of Health Kathleen Sebelius, Pawlenty said the appropriation was targeted to health programming consistent with how Minnesota currently structures subsidized health programs.
Originally banked on stimulus
Murphy, who is an assistant majority leader in the Minnesota House, was deeply involved last session in negotiations with the Pawlenty administration to ward off deep cuts to state subsidized health care.
"I'm surprised that he's contemplating this," Rep. Murphy said, "It's something that he has studied. It's something he's agreed to put it into his budget. I thought that was a thoughtful decision, and I hope he does that again."
At the start of the year, Pawlenty banked on receiving the Medicaid stimulus aid to shore up the state's finances. But, when it became clear the legislative session would end before federal lawmakers could deliver that aid, the governor and legislators sought another solution.
"We reached agreement between the administration and the legislative leadership to use funds out of the cash flow account," Murphy explained, "And then we would use the money that came from Congress, when they passed this stimulus provision, to restore that money in the cash flow account."
The governor's national aspirations may also be affected by his choice. Pawlenty and other Republican governors have been sharply critical of President Obama and federal stimulus programs. If he were to accept the money, it would most likely lead Pawlenty's critics to accuse him of hypocrisy.
On the other hand, Democrats such as Murphy, are pressuring him to put the state's cash flow ahead of outside considerations.
"I am very concerned that the reason he doesn't want to accept this money is because it's a really good talking point in Iowa or in New Hampshire," Murphy remarked.
Lawmakers and the governor accepted ten times that much stimulus money, roughly $2.6 billion, in 2009 to balance the state's books. The Recession robbed the state of tax revenues at the same time struggling families turned to government programs for help in increasing numbers.
The most recent federal legislation passed on a party-line vote in Congress, with Minnesota Republican Michele Bachman, Erik Paulsen and John Kline voting against it. They shared Gov. Pawlenty's concerns about the impact on the federal budget deficit.
The package provided $16 billion nationwide in federal medical assistance, as well as $10 billion in aid to school districts in hopes of saving teaching jobs and reducing class sizes. Only the medical grants were set up to be contingent on the signature of a governor.
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