The House passed an omnibus finance bill that includes a major overhaul of state government, despite claims from some members that it is fiscally unbalanced.
HF577/ SF1047* is the omnibus state government finance bill. Sponsored by Rep. Morrie Lanning (R-Moorhead) and Sen. Mike Parry (R-Waseca), it would cut General Fund spending on state agencies by 34 percent from the forecasted base in fiscal years 2012-2013.
Passed 72-61 by the House, it now goes back to the Senate, where a different version passed 36-29 on March 30.
In addition to cutting most agencies’ operating budgets by 8-15 percent, the bill would enact wide-ranging reforms that include changes to the state’s workforce, loosening restrictions on outsourcing and consolidating services across agencies.
“This bill has more government reform proposals than we’ve probably seen in a long time,” Lanning said.
The bill would impact state workers in several ways. A 15 percent total reduction is called for in the number of state workers by 2015. It would also freeze state worker pay for two years and establish incentives to encourage employees to look for cost savings.
Rep. Keith Downey (R-Edina), who sponsored many of the policy provisions, said the bill would lead to better state services by empowering employees to be more productive and manage state programs more efficiently.
“We can fund our priorities and not the bureaucracy,” Downey said.
Opponents said the bill amounts to a thinly veiled attack on state workers and their collective bargaining rights. They also questioned whether the 15 percent reduction would leave agencies with enough staff to fulfill their missions.
“This bill clearly is unfair to state employees,” said Rep. Kerry Gauthier (DFL-Duluth).
During nearly six hours of floor debate, members argued over whether the bill would save as much money as its supporters claim. Some DFLers said a proposal to add $169.6 million to the state’s bottom line through a pair of revenue changes is unrealistic. Rep. Nora Slawik (DFL-Maplewood) said Republicans are deliberately ignoring fiscal notes from Minnesota Management & Budget that show a much smaller rate of return.
“I thought you came here to make cuts. Now you’re booking revenue that doesn’t exist,” Slawik said.
Lanning and others countered that the fiscal notes are biased in favor of preserving the status quo. They said agencies tend to overestimate the cost of implementing reforms while ignoring the savings they would achieve.
“There comes a point where we have to make some judgments ourselves… and my best judgment says that this bill is in balance,” Lanning said.
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