Minnesota Governor To Begin "Unallotments"

Three cheers for the few willing to make a step in the right direction. Minnesota's governor is one of the few. Please consider Pawlenty gets official go-ahead to begin making budget cuts.

Let the cutting begin.

Minnesota's top state finance official on Thursday formally notified Gov. Tim Pawlenty that the state will not take in enough money to pay its bills over the next two years, setting the stage for the governor to start using his executive power to unilaterally cut spending.

In a letter to Pawlenty, Management and Budget Commissioner Tom Hanson wrote that, as expected, the spending he and the Legislature approved for 2010-11 would exceed the state's revenue collections by $2.7 billion.

"Therefore, at the beginning of the next fiscal year (July 1), it will be necessary to reduce allotments of appropriations or transfers," Hanson wrote.

Under state law, Pawlenty can't start to cut spending until the commissioner notifies him that the state faces a budget shortfall. Hanson's letter satisfies that requirement.

Pawlenty has said he will start making spending reductions, officially known as "unallotments," as soon as possible after July 1 to protect the state's credit rating and give him the most possible options.

Let The Cutting Begin

Cutting services rather than raising taxes is the right thing to do.

Pawlenty is looking to cut health and welfare spending, college and university appropriations and state agency budgets. That's a good start, with start being the operative word. Eliminate would be a better word for many state agency departments.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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