The promises sound almost too good to be true: free college for top students, more cops on the streets and big new investments in environmental protection - all at no extra cost to most Minnesotans.

On the campaign trail this year, the three leading candidates for governor have perfected the small-pain, all-gain approach to budgeting. Instead of calling for general tax increases, they're embracing creative accounting. But economic analysts question whether any of them can take their budget to the bank.

Democratic nominee Mike Hatch says a crackdown on tax cheats and a harder line on corporate taxes would produce a big-buck payoff. Republican incumbent Tim Pawlenty claims natural gains from an economic hot streak would do the trick. The Independence Party's Peter Hutchinson sees hundreds of millions of dollars in health care savings ripe for the taking.

"There's an attempt by many politicians to be elected by maximizing ambiguity," said Brigham Young University professor Gary Cornia, an expert in state budgets and tax policy. "It's hard work to get more money to run a state. There are winners and losers. No one wants to identify the losers."

Minnesota's two-year budget is more than $31 billion and likely to go higher when the next one is adopted in 2007. The state constitution prohibits lawmakers from spending more money than they take in.

He broadly declared his support for additional classroom funding, but hasn't said how much or in what form. He also wants the state to offer two years' worth of free tuition for students in the top 25 percent of their high school graduating class, which would cost $112 million initially and more down the road.

Pawlenty is betting a surging economy will make those things possible by bringing the state treasury more money than expected. In July, budget officials estimated that the state collected $450 million above expectations over the previous three months. The next comprehensive forecast report isn't due until weeks after the election.

"I don't think anyone can credibly say we haven't been fiscally aggressive or fiscally responsible," Pawlenty said in a recent interview. "We should be able to fund our priorities like education and health care when you have double-digit revenue growth without raising taxes, and that's my plan."

Robert Kurtter, senior vice president for state ratings at Moody's Investors Service, said the U.S. economy, which has a heavy influence over the state's condition, is in reasonable shape. But he identified some risks, including world instability, a softening housing market, a struggling auto industry and inflation.

States that want to maintain strong credit ratings - making it cheaper to issue long-term bonds for construction projects - need to exercise restraint, Kurtter said.

"There's a difference between what you think the economy is going to do and how you budget for that economy," he said. "You don't necessarily budget for the economy you expect, but you budget for the economy that might occur - if you're conservative."

The two-term attorney general has proposed slashing tuition at public colleges, helping communities hire as many as 1,000 police officers and putting state money into stem-cell research. He estimates that their combined cost would add $370 million to the two-year budget.

In coming weeks, Hatch intends to lay out a K-12 education funding plan, which he said could include expanded all-day kindergarten, a longer school year and a class-size reduction initiative.

Hatch relies on two funding streams. He argues the state should wipe away exemptions that make it easier for corporations with foreign outposts to shield income from tax collectors - a proposal that has been a flashpoint in the tax debate for years.

Newer to the conversation is a government report suggesting there is as much as $1.5 billion annually in unreported or uncollected taxes in Minnesota, which Hatch has seized on.

"That is money laying on the table, according to the legislative auditor," Hatch said. "You don't see one peep out of the Department of Revenue questioning those figures. Not one."

The $1.5 billion breaks down roughly like this: It assumes that individual taxpayers are shorting the state by $600 million, mostly self-employed people whose income is harder to verify. Another $450 million is from sales and use taxes the state has trouble obtaining, sometimes because of Internet purchases made through companies with no Minnesota presence. The remaining $450 million is the result of known tax debt, which can be tough to get at because of bankruptcy filings, among other obstacles.

An author of the report, auditor Deborah Junod, said it's clear that there's money to be had. But, she said, "It's probably neither desirable nor feasible to get all of it."

Junod said it would take a more intrusive level of reporting and a core team of skilled auditors the Revenue Department now has trouble keeping on staff.

Jonathan Feinstein, a Yale University professor who does tax compliance studies for the IRS, said estimating the tax gap is one thing and correcting it is another.

The report's projection that Minnesota has a compliance rate of 89 percent for the income tax is higher than the national rate, Feinstein said.

The report estimates a return of as much as $7 for every dollar put into audits - in part because they uncover additional tax liability and also because the extra vigilance leads to more voluntary compliance from people who fear an audit.

He maintains state and local governments can squeeze $1.7 billion a year from the health care system by forcing companies to provide better medical care at lower prices.

Hutchinson, a consultant and former state finance commissioner, ties all of his new spending to projected health savings. There's $400 million a year to beef up education programs - from early childhood through college - and $200 million annually to clean up polluted waters and carve out more wildlife habitat areas.

"We've got to get health care in order to produce these other things people want," Hutchinson said. "Failing to do that will mean that none of these good ideas from any candidate, including me, will ever be implemented. There's no money. The rate we spend on health care, every new dollar we spend is on health care."

Almost half of the money in Hutchinson's savings plan would be achieved by forcing providers to use common forms and technology, which he hopes would cut administrative costs in half by the end of a four-year term.

Among government health programs, advocates for leaner overhead often point to the nation's Medicare program, which by some estimates is as low as 3 percent.

He said state and local governments consume $8 billion in health care services - through employee coverage and subsidized insurance programs - giving them leverage to negotiate for lower administrative costs.

Economics professor Jim Ashley of the College of St. Catherine said Hutchinson's savings goal strikes him as "a very dubious prospect." Jennifer Schultz, who directs the Health Care Management Program at the University of Minnesota in Duluth, also has her doubts.

"That doesn't seem very realistic to me and that shouldn't seem realistic to the voter," she said, noting that the state would undoubtedly have to offer incentives to companies to make systems compatible and adopt uniform standards.

This is cache, read story here