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Gambling revenue part of the Minnesota budget mix

ST. PAUL -- Some legislators are considering gambling revenue to balance the Minnesota budget, one of the few surprises Thursday as the 2010 legislation session began.

ST. PAUL -- Some legislators are considering gambling revenue to balance the Minnesota budget, one of the few surprises Thursday as the 2010 legislation session began.

Legislators' major job is to plug a $1.2 billion hole in the state budget, a budget with nearly a year and a half left. They also need to look at a much bigger deficit that is likely in the next budget.

The current two-year budget is $30 billion, down $4 billion from the last budget.

Lawmakers came into their session, which must end no later than May 17, with the major divide being simple: Democrats want a combination of budget cuts and tax increases to balance the budget, while Republicans tend to want to balance the budget just by cutting.

On Thursday, a different scenario surfaced, to add gambling to the state's revenue pot.


"Gaming bills are going to get a real look this year, and they should," Rep. Al Juhnke, DFL-Willmar, said.

Juhnke would not say much about the pro-gambling movement but said a plan could surface in two or three weeks. He said it would include adding a casino to a Twin Cities horse racing track, known as a racino, and video pull tabs in Minnesota bars.

The two changes could bring in $875 million or more a year, Juhnke said.

The key for gambling to succeed in this year's session, he added, is to spend gambling revenue on a wide variety of areas, such as early-childhood education, a Vikings football stadium and agriculture. If the revenue is spread wide enough, the concept could attract more legislators' votes.

"We are only a handful of votes off in both bodies," Juhnke said of the House and Senate.

But Juhnke's leader did not think the gambling proposal has a chance.

While House Majority Leader Tony Sertich, DFL-Chisholm, promised that the proposal would get a hearing, he said that gambling is not a reliable revenue source.

Besides, he added, adding a racino in the Twin Cities would drain business from rural American Indian casinos.


Sen. LeRoy Stumpf, DFL-Plummer, said gambling cannot be the only answer. "You don't want to say this solves all problems."

Sen. Dan Skogen, DFL-Hewitt added: "There is a leg effect" and even if gambling were approved it would not be available to fix the current budget.

Gov. Tim Pawlenty mentioned in a Wednesday radio interview that one potential stadium funding source is a lottery game but stopped short of endorsing the idea.

A fair amount of pessimism hung in the air Thursday as lawmakers looked to their job of balancing the budget.

Retiring Sen. Steve Dille, R-Dassel, said he is not optimistic that legislators will be able to put aside partisan differences. He added that he is worried several lawmakers are looking past this session to the election. Eight lawmakers are running for governor and another is in the middle of a congressional campaign.

Dille urged both sides to sit down and focus on the task at hand.

"It has to get done," he said. "It's time for us to put down our sabers."

No one expects an easy session.


"It has been said this is going to be one of the toughest sessions ever," Sen. Bill Ingebrigtsen, R-Alexandria, said.

Sen. Mary Olson, DFL-Bemidji, was slightly more optimistic than some lawmakers, indicating that she senses a cooperative mood among her colleagues. At the same time, she indicated that the existing budget problems have been exacerbated by borrowing from reserves, and rainy day and tobacco settlement funds, and she hopes the deferred school district payments are not a furthering of that trend.

"We have no way of knowing where the money would come to repay those," she said. "That's a road we can't afford to keep going down. At some point we're going to have to come to terms with trying to work with the governor to get his agreement to pass an honest budget."

Rep. Steve Drazkowski, R-Wabasha, was happy to hear Democrats say that at least part of the budget solution is cutting programs.

"Democrats have decided we have to focus on spending," he said. "The public common sense is prevailing."

Drazkowski said he did not see budget cutting high on Democrats' agenda last year, although Sertich said he must not have been paying attention because Democrats did work on cuts.

"There is hope, as long as we focus on spending," Drazkowski said.

One of Pawlenty's most controversial moves has been delaying state payments to schools, which drew lots of comments.


"This is a risky move that uses our schools as the state's bank," Sen. Yvonne Prettner Solon said. "Our schools are in the business of educating children, not in providing loans to fill gaps in the state's budget."

The Duluth Democrat said she supports a move to change the law requiring the state to delay school payments before it can take out an outside loan. The Pawlenty administration said the delays are necessary for the state to pay its bills this spring.

"Shifting and delaying funds we promise to our schoolchildren does not solve the problems before us," Prettner Solon said.

Sen. Katie Sieben, DFL-Cottage Grove, said that delaying school payments punishes districts that are doing the right thing.

"I'm concerned that this action targets Minnesota school districts that are fiscally responsible and were able to maintain some savings," Sieben said. "Now, with their state aid payments being withheld, some of these districts may be forced into short-term borrowing to pay their own bills."

Davis and Tellijohn report for Forum Communications Co., which owns the Herald.

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