In his last State of the State Address Thursday, Gov. Tim Pawlenty mixed humor with serious proposals regarding what he deemed as Minnesota’s most pressing issue — job creation.

The second-term governor stressed that the private sector is key in job creation, at one point saying the message from businesses is clear: “Get out of our way. Leave us alone. Make it easier, not harder.”

To that end, Pawlenty proposed a six-point Jobs Creation Bill that would reduce the corporate tax rate by 20 percent, cut taxes on small businesses and provide tax incentives to new start-ups.

The governor, who has adamantly stood behind a “no new taxes” pledge the last eight years, said these measures would be much more fiscally responsible than more taxes and more spending.

“We need to reduce government spending because it leads to job-killing tax increases,” Pawlenty said.

To further that point, the governor said he would be calling for a constitutional amendment that would require future spending commitments to not exceed revenues, something Pawlenty deemed a “common sense approach.”

“We should spend only what we have, not what we hope to have,” he said.

Pawlenty’s pleas come at a time of great economic turmoil in Minnesota. The state currently faces a projected $1.2 billion deficit, which is on the heels of budget problems that led the governor to use the controversial power of unallotment in June.

As part of that unallotment, Austin lost nearly $1.3 million in Local Government Aid, while funding to Mower County was also slashed. On Thursday, Pawlenty said his budget proposal, which will come out Monday, will include “dramatic and painful spending reductions,” which will likely include further cuts to local governments.

It will then be up to the Minnesota Legislature to either stomach the cuts or to wait and see if Pawlenty exercises the power of unallotment again at the end of the current session.

Sen. Dan Sparks, DFL-Austin, said either way, citizens and local officials should brace for possible funding reductions to LGA and county aid.

“You bet they should be (worried),” Sparks said.

That doesn’t mean, however, that the senator wants to see that happen. Sparks said he is a big proponent of LGA, but he understands the state is in an economic crisis and tough decisions need to be made.

“I think it’s going to be difficult,” Sparks said of the budget process.

Sparks did say he liked Pawlenty’s focus on jobs and agreed that it is a key issue. However, Sparks said House and Senate Democrats would need more time to review Pawlenty’s specific proposals before weighing in.

But Sparks did acknowledge that he finds it hard to imagine the Legislature being successful with any type of counter proposal that includes tax hikes.

“(Gov. Pawlenty)’s been pretty firm to ‘no new taxes,’ ” Sparks said.

In addition to compromising on a jobs bill and the budget, the Legislature is also tasked with enacting a bonding bill, which would help fund a number of infrastructure projects throughout the state.

Separate bonding bills were introduced in each house as soon as the legislative session began Feb. 4, and on Tuesday the Senate passed a roughly $1 billion proposal.

However, the governor has said he wants to see a bill closer to $685 million, and the two sides must work out their differences soon if public works projects are to get started once snow melts.

Sparks said he’s optimistic that Pawlenty and the Legislature will reach an agreeable compromise sooner rather than later. The senator added that he liked the governor’s “tone” Thursday and thinks Pawlenty is serious about working on tough spending issues in a bipartisan fashion.

“If we put our heads together, we can get it done,” Sparks said. “We understand the importance.”

Other Democrats, however, were more critical of Pawlenty after his speech. Democratic legislative leaders, at a press conference immediately following the State of the State, said it was the same old rhetoric from the governor.

“It’s pretty much boilerplate Tim Pawlenty. And I think we’ve heard roughly the same speech for the last seven years,” Senate Majority Leader Larry Pogemiller, DFL-Minneapolis, said.

Rep. Jeanne Poppe, DFL-Austin, also said she was less than impressed with the governor’s vision for Minnesota’s future.

“I don’t know if it was his best (State of the State Address),” Poppe said.

The representative said Pawlenty’s job proposal sounds like a nice fix, but she noted that the governor neglected to discuss how it would be funded.

Increasing revenue via increased taxes could solve that, Poppe said, but the governor has been too stubborn with his anti-tax stance to make that route even remotely viable for legislators.

“I believe he’s set the rules of the game,” Poppe said. “He’s going to continue to squeeze and squeeze and squeeze.”

That squeeze, Poppe said, will likely impact local governments in the form of funding cuts.

“I really think the (governor’s) message continues to be, ‘You better be trying to figure out what you can do locally to realign services, to readjust,’” she said.

But perhaps most troubling to Poppe is what she perceives as a lack of leadership and involvement on the governor’s part during the whole legislative process.

“I want him to lead. I want all elected officials to do that,” she said. “Our job is to put forth bold ideas. I don’t know that I’ve seen that from him.”

Pawlenty acknowledged during his speech that he was bound to face criticism, but he urged the Democrat-dominated Legislature to be proactive, especially when it comes to the budget.

“The reaction to my budget proposals from most people in this room will be predictable,” the governor said. “Fair enough. I look forward to your alternative proposals.”

Amid the strong words and serious proposals, Pawlenty did find time for levity. He made cracks about Star Tribune columnist Sid Hartman, the Minnesota Vikings and the Northwest Airlines flight that missed the Minneapolis airport by 150 miles in October.

“Visitors sometimes don’t understand the love we have for this place,” the governor quipped. “They think of it as cold, far from oceans, and a place that even airline pilots can miss altogether.”

When the chuckling died down, Pawlenty, who announced in June that he wouldn’t be running for a third term, said he was honored to have served such a place for the last eight years. Citing the Minnesota Constitution, the governor closed his speech by saying, “May God bless you and may God continue to bless the great state of Minnesota.”