If the omnibus jobs and economic development finance bill could be summed up in one sentence, it might be “making the best of a bad situation.” For some, it isn’t good enough.
Sponsored by Rep. Bob Gunther (R-Fairmont) and Sen. Geoff Michel (R-Edina), HF1049/ SF887* would cut spending on jobs and housing programs, while attempting to protect certain priorities like helping small businesses grow new jobs.
“We prioritized our spending to focus on workforce development programs that are needed to help Minnesotans get back to work,” Gunther said.
The bill also seeks to protect programs that help the physically and mentally disabled – although some members said it falls short in that goal.
“Some of the housing programs that are cut serve the most vulnerable – the poorest of the poor,” said Rep. Karen Clark (DFL-Mpls).
Passed 70-60 by the House on April 5, the bill now returns to the Senate, where a different version passed 36-28 on March 28. A conference committee will likely work out the differences.
Overall, the bill would fund housing, workforce and economic development programs for the 2012-2013 fiscal biennium. It proposes General Fund reductions to several agencies, including:
• 10.8 percent to the Housing Finance Agency;
• 7 percent to the Department of Labor and Industry; and
• 5.8 percent to the Department of Employment and Economic Development.
Funding for DEED and HFA goes to support a range of programs, many of which would have their funding reduced in the bill. Opponents spoke out against cuts to the Minnesota Trade Office, the Extended Employment Program and Advocating Change Together, to name a few.
“Everyone knows how tough this job market is, and I’m very disappointed that we’re not doing more in what is supposed to be a ‘jobs session,'” said Rep. Diane Loeffler (DFL-Mpls).
Far from defending the bill’s appropriations, Gunther agreed that the proposed cuts are unfortunate. He noted that funding for jobs and workforce programs has been reduced fairly consistently in recent years.
“We’ve had quite a few years of what we could honestly call a jobless jobs bill,” Gunther said. “I was dealt a rotten hand this time, and I didn’t enjoy it a bit.”
During the more than four-hour floor debate on the bill, it was not the budget cuts, but rather a proposed transfer from an Iron Range trust fund that took center stage.
In order to prevent deeper cuts to state agencies, the bill utilizes $76.3 million of one-time money. This includes $60 million from the Douglas J. Johnson Economic Protection Trust Fund, which is paid by a production tax that mining companies pay in lieu of property taxes.
Members of the state’s Iron Range delegation said taking money from the fund is tantamount to stealing local property tax dollars. They decried the provision as an unfair attack on the range, which has historically been considered a DFL stronghold.
“This is a targeting of people because of where they live and who they are and how they vote,” said Rep. Tom Rukavina (DFL-Virginia).
Rep. Tim Mahoney (DFL-St. Paul) unsuccessfully offered an amendment that would have taken the trust fund transfer out of the bill, resulting in an additional $60 million cut in spending. Supporters of the amendment said Republicans are not being honest about the need for new revenue in the state’s budget.
“When you need to find $60 million of one-time revenue to pay for your spending, you’re admitting that it’s a revenue problem, not a spending problem,” said Rep. Paul Marquart (DFL-Dilworth).
Rep. Steve Gottwalt (R-St. Cloud) accused DFLers of “misdirection,” saying the amendment was just a way to distract from the billions of dollars in tax increases they would prefer to pass to balance the budget.
“Don’t be fooled for a minute. The GOP majority is doing the responsible thing,” he said.