Last week in his budget proposal, Gov. Pawlenty made one concession to the forces who insist raising revenue has to be part of a shortfall solution. But in typical fashion, he proposed raising revenue in a way that would let him claim he didn't raise taxes.
Yes, I'm talking about his plan to sell nearly a billion dollars in bonds secured by Minnesota's stream of annual tobacco settlement payments.
Never mind that this maneuver is a one-time patch that borrows against future revenue originally dedicated for health-related purposes. Yes, it's a gimmick. But unlike his trick of deferring education expenses into the next year, it's still a revenue-raising gimmick.
Commissioner Tom Hanson of the Department of Management and Budget will testify on behalf of the plan Tuesday. He insists that Minnesota's bond proposal is better than the approach taken by other states that have drawn down their tobacco money to balance budgets.
I'm sorry I won't hear the commissioner explain that statement to skeptical legislators.
Maybe he's saying: "Our approach is more prudent because, instead of paying for ongoing programs, we're using proceeds from these bonds to make payments on the other times we borrowed."
Mark Heaney last week called this proposal a payday loan, and I likened it to burning the orchard to heat the house for one winter.
But perhaps Hanson meant something like: "Unlike states that sold the tobacco revenue stream at a discount, we're retaining long term control. We'll use part of our annual tobacco payments to pay off the investors who bought our bonds."
Still confused? Maybe that's the idea.
One way Minnesota's proposal is like other states such as New York and California: We're starting by only relinquishing about half our tobacco revenues. But after those states got hooked, they came back and sold off the rest.
Another way — Minnesota may have to pass legislation that guarantees the bonds if tobacco payments don't amount to what was projected in a given year.
Maybe we have it all wrong and the affable commissioner will straighten us all out on Tuesday. But I don't think he can contradict this... Minnesota needs more revenue, and even the no-new-taxes governor will find a way to do it — as long as he can blow smoke.
