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Headlines tell the tale: '08 budget deficit is child's play next to Quie's '80s challenge

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Fixing a $935 million shortfall in Minnesota's biennial budget is no tiny matter. Hundreds of million dollars here and hundreds of million dollars there, to inflate a famous axiom, is real money. But truth be told, coming up with less than a billion dollars is child's play when compared to solving the $4.2 billion deficit the state faced when Gov. Tim Pawlenty was first elected in 2002. Now, that was tough.

But if even more truth were told, budgetary stringencies now facing Minnesota are positively infants' play compared to what Gov. Al Quie and legislators faced in the early 1980s, when the nation fell into a truly deep recession compounded by high cost-of-living increases.
 
I served on Quie's staff back then and recently had cause to look at every newspaper clip about him in the Legislative Reference Library in St. Paul from the time he announced his candidacy in 1977 through his last day in office at the end of 1982. I think of those days often, but it wasn't until I reviewed pounds of ugly headlines, stories, editorials and cartoons that I adequately recalled the period's ceaseless water torture of rotten news.

Biennium total was under $8.2 billion
As you consider the spending cuts and sometimes tax increases in the snippets below, keep in mind that total general fund expenditures in the 1980-81 biennium eventually totaled only $7.2 billion. For 1982-83, it was under $8.2 billion. Given the immensity of adjustments that had to be made, this was a sliver of money with which to work. By comparison, Minnesota's general fund expenditures for 2008-09 are projected to total about $34 billion.

A story on June 19, 1980, by Robert J. O'Keefe in the St. Paul Dispatch foreshadowed what was to come: "If surplus dwindles, Quie could face voters' wrath." A dozen days later, a headline in a Minneapolis Tribune editorial told of a "Recession in non-metropolitan Minnesota."

A dozen days after that, a story by Gary Dawson in the Dispatch was headlined: "Quie could face $200 million deficit, [Roger] Moe says."

Intimations about taxes grew stronger in a story by O'Keefe on December 8: "In a sharp turnaround from his earlier position, Gov. Al Quie hinted today that a tax increase may be necessary at the 1981 Minnesota legislative session."

Damage explicit: $503 million
On April 2, 1981, a headline in the Minneapolis Star sounded an increasingly familiar refrain:  "Revenues fall short, set Quie scrambling." A week later, a headline in the Daily Journal in Fergus Falls made the new damage explicit: "Quie must cut $503 million."

And a week after that, a headline in the St. Paul Pioneer Press a described the governor's new attempt to stop the bleeding: "Quie asks tax hike, more cuts, curbs on city-county spending."

Six weeks later the Pioneer Press was able to announce: "Quie, DFL agree on sales, income tax hikes." The number, more precisely, was $555 million worth.

"Quie likely to call 3rd special session," read a headline in an October edition of the Star.

A November headline in the Star blared: "Deficit put at $860 million; Quie calls for special session."

A little under three weeks after that, a story in the Dispatch opened:  "Gov. Al Quie today recommended reductions of more than $775 million in state spending... ." The year ended with Lori Sturdevant writing in the Tribune that the governor's "hard-line opposition to an increase in state income taxes appeared to soften a bit Monday. ..."

Opposition evaporates
A week into 1982, a headline in the Tribune disclosed: "Quie would back tax increase if spending is cut $460 million."

Jump ahead to the end of the year, and a November AP story in the Faribault Daily News opened: "Gov. Al Quie and legislative leaders were back in familiar roles Thursday mulling over a $312.5 million shortfall in state revenues. . . ." 

All was resolved on Quie's watch a couple of weeks later, with the Sunday Tribune in Hibbing announcing: "$342 million bill ends week of political drama."

Toward the end of one of my recent conversations with Quie about the budget crisis of more than a quarter century ago, I referred to bringing the topic to "closure."

"The closure," he answered quickly and with emphasis, "is that we solved the problem and gave Rudy Perpich [his successor as well as predecessor] about a half-billion-dollar surplus."

Mitch Pearlstein is founder and president of Center of the American Experiment.  He's currently writing a book about Al Quie, due out this fall by Pogo Press.

This commentary originally appeared in MinnPost.com on April 14, 2008.
Permission to reprint in whole or in part is hereby granted.

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