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Major state budget topics

Some issues in Gov. Tim Pawlenty's $34.4 billion, two-year budget:

Property taxes

Much-discussed property tax cuts would consume $150 million of the budget.

Of that, $10 million would go to increasing Local Government Aid, a state payment to cities, mostly rural and Minneapolis and St. Paul. Another $47 million would be used to give tax credits to homeowners across the state, with $40 million more going to schools.

Pawlenty also would limit how much property taxes could rise in cities that get more than a third of their budgets from the state. Property tax in 87 cities would be capped; city officials in those cities would only be allowed to raise property taxes to match inflation and to take care of population growth.


The governor suggests increasing education funding $1.1 billion -- $714 million for public schools and $414 million for higher education. That would give education about more than half of the general fund budget.

For K-12, he would give each school district a 2 percent general funding increase for each of the next two years and schools meeting higher standards could get another 2 percent increase. He also suggests spending $75 million for 3R Schools, those that implement more rigorous standards.

Pawlenty proposes increasing University of Minnesota funding $153 million and wants to up Minnesota State Colleges and Universities spending $123 million.

Health care

The health care system would get $274 million more under the Pawlenty budget.

Pawlenty's plan includes spending $31 million to expand access to health care, lower insurance premiums and offer incentives for quality care. For instance, a so-called health insurance exchange, costing $12 million, would help people pay for premiums. The MinnesotaCare health insurance program for the poor would insure about 23,000 more children and give enrollees more health-care choices.

Among Pawlenty's proposals is one to increase nursing home aid $92 million, part of which would be contingent upon the homes meeting higher card standards.


Energy programs are scattered throughout the governor's budget plan.

He would spend $10 million to courage creation of a new generation of biofuels, going beyond today's ethanol and biodiesel.

Rebates for buying plug-in hybrid vehicles, solar power equipment and other green energy sources would cost $5 million. He also would spend $12 million to add 1,500 E-85 ethanol pumps around Minnesota, which already has far more E-85 pumps than any other state.

Pawlenty's total energy package costs $40 million.

He also wants to spend $40 million on cleaning up the state's water, $21 million to help manage forests and $4.5 million to protect wetlands.


Pawlenty did not recommend a tax increase to increase transportation funding, something many legislators have sought.

However, he did suggest borrowing $1.7 billion over the next decade. He also said he wants $67 million in sales tax on leased vehicles to go to transportation needs instead of where it goes today - the general fund.

The governor would establish a pilot project, costing $5 million, to determine if the current gasoline tax could be replaced by one based on mileage.

Another $19 million would be added to the State Patrol budget to hire 40 more troopers. Also, $3 million would be spent to improve Capitol security.


While not one of the biggest expenditures, Minnesota policymakers have discussed ways to help veterans and active military personnel.

It is a $75 million proposal. Soldiers returning from combat would see a 14 percent increase in assistance program funding.

The state's veterans' department, meanwhile, would get more money to publicize programs available to veterans as well as more money for the Minnesota Assistance council for Veterans and to county veterans' offices. The plan also would add 12 more veterans' assistance offices on college campuses.

National Guard armories around the state would receive $3.5 million for increased maintenance.

Don Davis
Don Davis has been the Forum Communications Minnesota Capitol Bureau chief since 2001, covering state government and politics for two dozen newspapers in the state. Don also blogs at Capital Chatter on Areavoices.