Minnesota shuts down — to Pawlenty’s benefit?

Minnesota’s government shutdown is into its second week, paralyzing all but essential state government services, leaving 20,000 employees out of work and sullying the state’s reputation for bipartisan cooperation.

So why is Tim Pawlenty happy?

The former two-term Minnesota governor is seizing on the shutdown to boost his struggling presidential campaign.

Pawlenty (R) is shrugging off critics who accuse him of not repairing Minnesota’s structural budget problems during his tenure, and using the shutdown to highlight his gubernatorial record of balancing budgets without raising taxes.

Pawlenty is encouraging the state’s Republican legislative leaders not to budge from their refusal to consider any tax hikes in their face-off with Democratic Gov. Mark Dayton over how to close the state’s $5 billion budget deficit.

“I applaud the Republican legislature in Minnesota for standing strong and standing firm and saying we’re not going to raise taxes in Minnesota,” Pawlenty said at a recent town hall meeting in Iowa. “We don’t have a state in Minnesota that’s over-taxed, we have a state that has spent too much, before I became governor, and we’ve got to get it back in balance.”

Pawlenty’s gleeful embrace of the uncompromising politics animating the Minnesota budget standoff is not without risks. The confrontation is reminiscent of the pitched battles to trim government wages in recent months by GOP governors in states including Florida, New Jersey and Wisconsin.

Although those officials were successful in imposing big cuts and holding the line on new taxes, they are all now dealing with sagging approval ratings. But Pawlenty allies say the risk is worth it to boost a campaign that has been lagging far behind in the polls. A survey among Iowa voters last month showed his support stood at just 6 percent, well below 23 percent for former Massachusetts governor Mitt Romney.

“We are at a pivotal moment on the issue of spending,” said Charlie Weaver, a onetime chief of staff to Pawlenty and executive director of the Minnesota Business Partnership. “When you compare him to [Rep.] Michele Bachmann [a fellow Minnesota Republican who has risen in the presidential polls], for instance, an obvious difference is his executive experience. In today’s environment I think people are looking for someone who has a proven record of fiscal restraint and is competent.”

It is a point Pawlenty has been hammering since the Minnesota shutdown started July 1. At multiple campaign stops and in ads airing in Iowa, Pawlenty has touted his role in Minnesota’s nine-day government shutdown in 2005, saying that at times extreme measures are appropriate.

Pawlenty has bragged that the confrontation ended in reduced spending and a “win” for him over public employee unions and his Democratic rivals.

“Minnesota government shut down,” the ad says. “Why? Because Gov. Tim Pawlenty would not accept Democrats’ massive tax-and-spending demands. Result? Pawlenty won.”

If he had it to do over, Pawlenty has said, he might have allowed the shutdown to drag on longer to extract more concessions.

Citing his experience in Minnesota, Pawlenty also has called on congressional Republicans not to accept any deal to raise the debt ceiling that involves spending or tax increases.

Any deal that “might include tax increases or more spending . . . doesn’t really fix the finances of our country and is unacceptable,” Pawlenty said Friday.

“This fits into a new norm where ungovernability becomes a political selling point,” said Larry Jacobs, a University of Minnesota political scientist who has followed Pawlenty’s career. “Winning the Republican presidential nomination means winning the backing of some pretty conservative tea party supporters. In that context, shutting the government down demonstrates authenticity.”

Although Pawlenty has cast himself as a budget hawk, he has also been blamed by some critics for leaving behind a $6.2 billion projected deficit when he left office in January.

Like many state leaders, Pawlenty balanced his last budget by relying heavily on one-time federal stimulus money. He also slowed dispersal of state aid to local school districts and used other accounting gimmicks.

Former governor Arne Carlson (R) has criticized Pawlenty for simply pushing many state expenses down to the local level during his years in office, causing local property taxes to go up by $2.5 billion during his eight-year tenure — more than the previous 16 years combined.

Pawlenty has dismissed the criticism, saying that the bottom line is that he left the state in the black.

“The last budget on my watch ended . . . with a positive balance,” Pawlenty said recently. “The projected deficit for the upcoming two years is based on large projected spending increases, which I never would have allowed as governor.”

The deadlock in Minnesota is showing no signs of ending, as the Democratic governor is refusing to close the budget gap only with cuts and Republican legislators are insisting on no new taxes. State parks, toll booths and construction projects have shuttered as a result, costing the state millions of dollars. A credit rating agency also downgraded the state’s bond rating, which will make it more expensive for Minnesota to borrow money for new schools and other projects.

Dayton has proposed closing some of the budget gap by raising taxes on the wealthiest 2 percent of taxpayers. But Republicans rejected that out of hand. When Dayton proposed making the levy temporary and adding a $1-a-pack cigarette tax, that was also shot down by Republican leaders.

“This is a really sad development in Minnesota,” Jacobs said. “If you go back four decades, people talked about the Minnesota miracle, a civic tradition of both parties finding ways to work together.”

Michael A. Fletcher is a national economics correspondent, writing about unemployment, state and municipal debt, the evolving job market and the auto industry.
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