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Kelliher: Time needed to fix Minnesota's '12-year slide' into deficit

After a "12-year slide" into a deficit expected to soon reach $5.8 billion, it will take a couple of years for Minnesota to once again have a stable state budget, the DFL-endorsed candidate for governor said.

After a "12-year slide" into a deficit expected to soon reach $5.8 billion, it will take a couple of years for Minnesota to once again have a stable state budget, the DFL-endorsed candidate for governor said.

Margaret Anderson Kelliher was in Crookston on Thursday to discuss innovation in agriculture and how it could help create more jobs to get the economy moving.

The visit was part of her "No Stone Unturned" jobs tour. She visited the Agricultural Utilization Research Institute, part of an initiative 20 years ago by the state Legislature to increase business and job opportunities in rural Minnesota.

AURI Executive Director Teresa Spaeth told Kelliher that her organization has had "a rough route" since 2003, when the funding was zeroed out by Gov. Tim Pawlenty's recommendation.

AURI has "fought back" and now has a larger portfolio and impact, Spaeth said. But it's been "devastating" to the staff over the years to see that their performance doesn't seem to be a factor in funding cuts.


"If we deserve to be cut, than we should be cut," she said. "But we should all be treated fairly and equally with other organizations. We've asked for that time and time again."

Kelliher said the state needs to use performance measures to assess how effective state-funded organizations have been. But she said the Crookston-based AURI is already doing what leaders "tell people all the time."

"You need to create more partnerships," Kelliher said. "And you've created tons of partnerships, and then to be really unfairly singled out. It feels like a real whack at rural Minnesota, and that can't keep happening."

The budget

Kelliher took questions from reporters after her tour, discussing the state's money shortfalls and her plans to get Minnesota back on track to fully restoring funding that has been cut in recent years to balance the budget.

She said her visit to Crookston was important because the AURI's work helps address "the most important thing" to the state right now: getting the economy back on track and creating more jobs.

Spaeth said the organization is involved in 221 projects and every dollar of state funding it receives results in $33 of impact, an amount that Kelliher called "tremendous."

"That's the sort of partnerships that we've been pushing organizations toward," she said. "Looking for that sort of return is really important to me and will be important going forward with how we put this budget together."


Kelliher has released her proposal to tackle the projected $5.8 billion budget deficit in the next biennium that begins July 1, 2011. She said 40 percent of that shortfall would be corrected by increasing revenue, mostly with "fair and progressive" income tax rates on residents who make more than $250,000.

Closing corporate loopholes and ending "sweetheart deals" also would allow the state to take in more money, she said.

Budget cuts and savings, including a crackdown on fraud in health and human services programs, would address another 30 percent of the deficit.

Kelliher said the remaining shortfall would, for now, be dealt with by using "temporary tools," most likely a continuation of delaying a portion of state payments to schools.

"We didn't get in this problem overnight," she said. "This has been really a 12-year slide into this budget problem, and we're going to need a couple of years to get ourselves back to good budget stability."

Kelliher got the DFL party endorsement for governor earlier this year. But Minnesota voters will pick only one of the four DFL candidates on the Aug. 10 primary ballot to advance to the November general election.

She's facing a primary challenge for the party nomination from Mark Dayton, Matt Entenza and Peter Idusogie.

Kelliher is "feeling good" about her chances of winning the primary and has started running advertisements to increase her name recognition. But she expects it to be a very close race.


"It's person-by-person, door-by-door, voter-by-voter," she said. "We have a ground operation to contact voters that is second-to-none, but you can't buy that with money. You have to be able to earn it and work at it, and we've done that."

Johnson reports on local politics. Reach him at (701) 780-1105; (800) 477-6572, ext. 105; or send e-mail to rjohnson@gfherald.com .

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