Minnesota's woes spell drastic cuts for its PR budgets

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

that money.

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.

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