MINNEAPOLIS: Minnesota PR firms are bracing for what could be major
cuts in state PR spending.
Minnesota faces a $1.95 billion budget gap brought on by the
Its governor, Jesse Ventura has called for $700 million in cuts
and higher taxes to erase the deficit.
"Every kind of communications, public affairs, and lobbying contract is
going to come under scrutiny," said Tom Horner, a principal with Himle
Horner, a Minneapolis firm. "PR and lobbying become easy targets to
Minnesota's budget problems could be a harbinger for other states.
Illinois politicians are already wrangling over a projected $250
million budget shortfall.
The Minnesota situation should come to a head in the next several weeks,
as the state legislature convenes. The mercurial Ventura has said that
if the legislature doesn't act in its first week back, he'll cut
expenses by executive order.
Some agencies are already seeing an impact. The Minnesota Department of
Health had planned to spend $12 million over two years on an
anti-smoking campaign with Clarity Coverdale Fury. But that cash was
temporarily halted as part of a statewide freeze on grant spending. The
department has since agreed to spend $3 million on the program
between now and the end of the state's fiscal year in June. Continued
spending after then depends on what the legislature does.
While money for the tobacco program comes from funds provided by tobacco
companies, states aren't obligated to spend those funds on anti-smoking
With budget issues looming, several states are considering dipping into
The Minnesota crisis also could affect PR firms' income from local
governments, since one proposal would see the state drastically cut aid
to cities and counties, said Kevin O'Connor, VP of public affairs with
Padilla Spear Beardsley. "These counties and local governments are going
to be hit by a $146 million cut in state aid," he explained.