In his State of the State speech earlier this month, Gov. Tim Pawlenty focused on the good news. He promised not to cut K-12 education funding. He vowed not to drop any children from state-backed health-insurance programs. The governor even proposed slashing taxes for corporations by 50 percent to spur job growth.
Missing from the speech was any realistic assessment of what those proposals would mean for other areas of the state budget if enacted. The reality of Minnesota’s looming fiscal mess, with the deficit expected to eventually top $5 billion, will become more clear when Pawlenty unveils his proposed budget on Tuesday.
But a closer look at the numbers gives a strong indication of what’s on the horizon: deep cuts in the state’s health and human services programs.
In the current biennium, the state’s general fund (the amount of money the Legislature has in discretionary spending) is $34.6 billion. Roughly 40 percent of that pot is consumed by K-12 education — easily the largest segment. The next biggest area of spending is health and human services, accounting for 28 percent of the general fund. No other spending priority accounts for more than 10 percent of the general fund.
So if you take K-12 education off the table, while not raising additional revenue, what does that mean? The health and human services budget will be gutted. There’s just no other way to square the numbers.
“If you don’t cut K-12, you’re going to double everybody else’s cuts,” says Rep. Thomas Huntley, chairman of the House’s Health Care and Human Services Finance Division. “I think K-12 has to take the same hit as everyone else. Will it be painful? Yes.”
Huntley, a Democrat from Duluth, believes that the budget deficit will ultimately be closer to $8 billion — or nearly 25 percent of the state’s general fund. So if K-12 education is fully funded, and every other portion of the budget takes roughly twice the hit, agencies would potentially be looking at a 50 percent reduction in funding.
What would it look like if the health and human services budge were cut in half? Health care programs for the poor, nursing home subsidies and mental health services would likely be drastically affected. While many legislators are preaching that the budget deficit is an opportunity to provide more efficient government services, consider this fact: 97 percent of the Department of Human Services’ budget goes towards program services. In other words, that money isn’t being funneled to paper-pushing bureaucrats, but into programs that people rely on to stay healthy and make ends meet.
“I’ve got a third of the state budget,” notes Huntley, “and I can tell you 90 percent of that is money we send to hospitals to treat people, or it’s money we send to nursing homes to keep people from dying in the streets, or it’s money that’s going to people with severe disabilities.”
Sen. Linda Berglin, the influential chairwoman of the Senate’s Health and Human Services Budget Division, agrees that K-12 has to be part of the the solution.
“You can give a school all the money that you want, but you can’t make up for families that are in trouble,” says Berglin, a Democrat from Minneapolis. “I think it’s very foolish, and maybe not being very honest with the public, to pretend that we’re going to maintain a high quality of education if we’re really attacking families by making these reductions in health and human services.”
Huntley believes that ultimately some form of revenue increases will have to be part of the equation — whether they’re called taxes or not.
“You’re looking at the tobacco tax; you’re looking at a few other things that they’ll call fees,” he says. “We’ll get through it. My goal is to not destroy things that we’re going to need five years from now when the economy recovers.”