March 5, 2010
The February budget forecast was announced on Tuesday, showing a moderate improvement from the November forecast, with Minnesota’s projected deficit for the current biennium down from $1.2 billion to $994 million. The state’s deficit shrunk by over $200 million, mostly due to $184 million in spending reductions, including $83 million in one-time federal health care funding. News on the budget forecast is good but still has a gloomy tone for the future. The projected deficit for the 2012-2013 biennium is a massive $5.8 billion. To put this in perspective, Minnesota’s current two-year budget is $31 billion. Governor Pawlenty has asked the DFL to present their ideas for a budget proposal by March 17.
The State Economist, Dr. Thomas Stinson, said the news on the economy did not get much worse or much better and emphasized that it will be a very long, slow road to recovery. The state’s economic growth depends on whether or not Minnesota is self-sustaining. Stinson added that the budget deficit and the speed of Minnesota’s economic growth is pretty much out of legislators’ hands. More than 25,000 construction jobs have been lost, and the sooner construction workers get back to work, the sooner they will begin spending money and adding to the state’s economic growth. Stinson also said that picking the “right” construction projects will be crucial for permanent growth rather than a temporary quick fix.
The Capital Investment Working Group unveiled a new proposal for a bonding bill on Thursday. At $986 million in general obligation bonds, the latest proposal has only a slightly smaller price tag than the previous version of the same bill. It is still much larger than Governor Pawlenty’s past proposal. Both the House and Senate passed a $994 billion bill last week, despite a letter from the Governor threatening to veto it, saying that Minnesota cannot afford a bill of that magnitude. Legislators made the decision to hold on to the bill instead of sending it to the Governor’s desk, knowing it would not be signed. Instead, legislators attempted to rework the bill and negotiate with the Governor, trying to draft a bill more to his liking.
The updated bill is the same size overall but includes more of Pawlenty’s priorities, including $36 million for a Moose Lake sex offender treatment facility and $16 million for security updates at the Oak Park Heights prison. Cuts were made to universities and various civic centers which were not in Pawlenty’s recommendations. The House and Senate will likely vote on the new bill next week but both chambers must agree on the bill before it is sent to the Governor. A spokesman for the Governor said he would either veto the bill in its entirety or line-item veto the bill to reduce it to an acceptable amount.
DFLers have proposed yet another bill in an attempt to keep alive General Assistance Medical Care, a program serving more than 30,000 of Minnesota’s poorest residents. Governor Pawlenty cut funding to the program last year. Legislators have already drafted a few versions of the bill, one of which passed in both chambers with overwhelming bipartisan support but was promptly vetoed by Pawlenty. The Senate voted to override the Governor's veto but the House override effort failed on party-line vote. After the failed vote, the House voted to table the bill, allowing legislators more time to draft a new proposal. The newest bill cuts payments to providers and prescription drug coverage, including some Republican proposals and lump-sum payments to the state’s largest hospitals to help cover GAMC patients.
Three Minnesotans filed a lawsuit on Thursday to prevent the end of GAMC, arguing that Pawlenty violated the state’s constitution when he cancelled the program using his unallotment powers to balance the state's budget. The lawsuit seeks a one month extension of GAMC and states there is enough money in the program's account to keep it going until April 1.
New Date for Primary Election
On Wednesday, Governor Pawlenty signed a bill that will move the primary election up one month, from September to August. Primary elections will now be the second Tuesday of August and gives Minnesotans living overseas more time to cast their votes. The bill, which will be especially beneficial to military personnel, complies with a new federal law requiring a minimum of 45 days for overseas voters to return absentee ballots. This year’s primary election will be held August 10rather than September 14.
Nuclear Plant Ban Remains
A bill proposing to lift the moratorium on new nuclear power plants in Minnesota was put on hold this week when an amendment was added to the bill introduced by Senator Amy Koch. Senator John Doll introduced the amendment which would lift the ban but would also apply conditions, including rate-payer protection and the federal nuclear waste repository. Koch removed the bill from consideration, saying that the amendment would stop the progress of any new nuclear power plants. The current ban has been in place since 1994 when Xcel Energy received legislative permission to store radioactive waste at its Prairie Island plant near Red Wing. Supporters of the bill say the ban was a mistake and nuclear power is economical and environmentally friendly while opponents point to the hazards of radioactive waste.
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