December 23, 2008
Pawlenty announces budget cuts to address $426 million deficit
Governor Tim Pawlenty outlined his budget cuts to rectify Minnesota's $426 million deficit using the executive power of unallotment. He announced the following cuts for the current biennium:
- $66 million reduction of local aids and credits to cities;
- $44 million reduction of local aids and credits to counties;
- $73 million reduction in human services spending;
- $40 million reduction in appropriations to the University of Minnesota and the Minnesota State Colleges and Universities;
- $40 million (a 10 percent reduction) in most state agency unexpended operating budgets;
- $4 million cut from the unspent balance in the Minnesota Housing Finance Agency Fund;
- $2.2 million in a voluntary reduction of the Legislature's unexpended funds;
- $1.5 million cut from the 21st Century Minerals Account, and;
- $700,000 cut from the Minnesota Investment Fund.
The Governor is reducing state aids and credits to cities and counties by a total of $110 million. That amount will be deducted from a larger amount to be distributed to cities and counties on December 26, 2008. County aid is being reduced by $44 million; the four counties with a population of less than 5,000 are exempted from these reductions. City aid is reduced by $66 million; cities with a population of less than 1,000 are exempted from these reductions. In effect, 60 percent of Minnesota cities (505 of 854) will not experience a reduction in their December aid payment.
A total of $73 million will be reduced in human services spending. This is less than one percent of the total biennial general fund appropriation. Of these reductions, $28 million will come from the Medical Education Research Costs (MERC) account. MERC receives $51 million annually from the general fund to provide funding for the clinical training of selected medical professions by compensating teaching facilities for a portion of the costs of clinical training provided in patient care settings.
Another $10 million will come from add-on payments to hospitals to treat Medical Assistance patients. This reduction will not affect base payment rates to hospitals. Additionally, the following unexpended grants and fund balances will be unalloted: $17 million from the Consolidated Dependency Treatment Fund, $2 million from new Mental Health Grants, $98,000 from Community Service/Service Development Grants, $2.717 million for Growth in Medical Assistance waiver programs, $250,000 from Housing Grants, $6 million from Adoption Assistance/Relative Custody Assistance, $491,000 from Patient Incentive grants, and $200,000 from Outreach bonus payments.
The Office of Minnesota Management and Budget predicts a $4.85 billion deficit for the next biennium. Some expect the projected deficit for the next biennium to grow to $5 to $6 billion over the next few months.
Recount Update: Minnesota Supreme Court hears case on rejected absentee ballots
While the State Canvassing Board continues to discuss the hundreds of challenged ballots brought forth by both the Franken and Coleman campaigns, the Supreme Court is now tackling the issue of absentee ballots. The Minnesota U.S. Senate race recount went before the State Supreme Court last Wednesday. The State Canvassing Board ruled last week that it could only make a recommendation to counties to have their improperly rejected absentee ballots counted. Coleman attorney Roger Magnuson argued that the ballots should not be counted, due to a lack of uniformity across counties. The Franken Campaign argues that every vote validly cast should be included in the official count. The Court gave no indication of when it would rule on this case.
Estimates put the number of improperly rejected absentee ballots at 800 to 1000. With the candidates divided by such a narrow margin, these absentee ballots could very well be the deciding factor in the Senate race.
Minnesota Environmental Initiative
State legislators and various environmental interest groups met last Wednesday at a forum to sponsored by the Minnesota Environmental Initiative to discuss their plans for the 2009 session. The conference included speakers such as Speaker of the House Margaret Anderson Kelliher, Senate Majority Leader Larry Pogemiller, Representative Marty Seifert (R-Marshall), Senator Ellen Anderson (DFL-St. Paul), Representative Jean Wagenius (DFL-Minneapolis), Representative Tom Hackbarth (R-Anoka), Representative Melissa Hortman (DFL-Brooklyn Park), Representative Kate Knuth (DFL-Arden Hills), and Representative Dean Urdahl (R-Grove City).
The primary focus of the 2009 session will most certainly be the attempt to balance the budget for the next biennium. At the same time, Minnesota is expected to lose 1,000 jobs per week in 2009. Facing such a possibility, Speaker of the House Margaret Anderson Kelliher stressed the importance in investing in "green jobs", and introduced the idea of a "Green Jobs Academy" to train technicians and workers in green jobs.
The Legislative Panel also discussed the importance of transparency regarding the allocation of revenue from the Clean Water, Land, and Legacy Amendment, revenue that is constitutionally mandated to go toward natural resources and cultural heritage purposes. The Minnesota budget allotment for Environment and Natural Resources currently stands at $216 million. This figure will nearly double with revenues from the Legacy Amendment, which is funded by a three-eighths of a percent increase in the state sales tax.
Environmental priorities set forth by the legislators for the 2009 session include climate change, green house gas emissions, and energy conservation. In order to cut costs, Representative Melissa Hortman stated that reforming building codes would save Minnesota $44 million by 2025. Setting appliance standards would also save the State $1.8 billion, according to Representative Hortman.
For up-to-date information about the Minnesota Legislature, tune into Almanac: At the Capitol. This lively and informative program is aired Wednesdays during the legislative session on Twin Cities Public Television at 7:00 PM on Channel 17 and at 10:00 PM on Channel 2.
Almanac: At the Capitol is seen on all public television stations throughout Minnesota and in Fargo. Winthrop & Weinstine is the exclusive law-firm partner and a sponsor of the program.
For more information and to see previous broadcasts, check out the Almanac: At the Capitol Web site at http://tpt.org/aatc/.