House DFLers on Wednesday showed the hand they say they’ll play to fix a $1 billion state budget deficit this spring.
Per Minnesota Budget Bites, the House Finance Committee released targets for the remaining areas of the state government budget, including the big enchiladas of K-12 education, Health and Human Services spending and any tax changes.
House DFL leaders plan to cut just $1 million from current K-12 spending, but anticipate making up $710 million worth of ground in Health and Human Services.
The targets also call for cutting the deficit by $105 million through tax changes, notably cuts in state aid to cities and counties.
This brings some clarity to the picture, since before now, House DFLers were only willing to outline $207 million in cuts to other areas of the state budget.
Set by leadership, budget targets leave the work of deciding where to cut and where to spend to the finance divisions. But look close and you’ll see what House DFL leaders have in mind.
The HHS cuts, for example, depend on $408 million in federal assistance that hasn’t yet been approved (something DFLers were quick to castigate Gov. Tim Pawlenty for doing in his budget proposal), and on $147 million in savings by passing the GAMC restructuring bill headed for a final vote this week.
That leaves the Health Care and Human Services Finance Division to their own devices to find another $154 million in savings from the system. Will it come from cutting provider rates to nursing homes? Reducing public health insurance eligibility? Those are the biggest budget savings areas remaining.
The Senate, meanwhile, has laid out its targets for everything except K-12 and Health and Human Services. Introduced earlier this week, their tax bill would also cut state aid to local governments by $105 million in the remaining budget cycle.
Pawlenty’s budget proposal, meanwhile, called for $133 million more in cuts to local government aid, $29 million more in cuts to Health and Human Services, $40 million more in cuts to higher education and $12 million more in cuts to K-12.
He called for $47 million less in cuts to energy — the Legislature would cut ethanol subsidies — and put $210 million back into the state’s empty cash flow accounts.
Bottom line: expect all the cards to be on the table by the Legislature’s Easter/Passover break at the end of March. In past sessions, DFL lawmakers went home and waited to see if there was enough of a public outcry against their proposed cuts to force tax increases back into the discussion.