All but a handful of jobs and housing programs in the state would see their funding reduced, under the omnibus jobs and economic development finance bill headed for Gov. Mark Dayton’s desk.
Sponsored by Rep. Bob Gunther (R-Fairmont) and Sen. Geoff Michel (R-Edina), HF1049/ SF887* would provide biennial funding for the Housing Finance Agency, Department of Employment and Economic Development, Department of Labor and Industry and a number of smaller agencies.
The House voted 71-61 on May 19 to re-pass the bill as amended by conference. It now goes to the governor. The Senate re-passed it 37-27 on May 17.
The bill’s net impact to the General Fund would be $138.2 million — a 17.8 percent reduction from base funding. Most programs would be reduced, with a few exceptions. The bill would infuse $2 million of new money in the first year of the biennium into vocational rehabilitation services, in order to leverage more federal dollars to help the disabled. The Housing Trust Fund, which funds rental assistance, would also get a $2 million boost. Finally, State Services for the Blind would get an extra $150,000.
The bill would reform the way grant money is distributed through DEED to nonprofit organizations that perform workforce and business development activities. Beginning in fiscal year 2013, the current system of “earmarking” would end. In its place, a series of three new competitive grant programs would be established: one for business development, one for adult workforce development, and another for youth workforce development.
“This innovation will drive nonprofit organizations that receive state funding to provide the best return on our investment,” Gunther said.
Though the organizations currently funded by DEED via pass-through grants would be able to compete for grant money under the new system, overall funding for these budget areas would be reduced. Rep. Karen Clark (DFL-Mpls) voiced concern about the impact of the cuts on particularly youth-oriented job training programs.
“This is one of those huge missed opportunities,” Clark said.
The conference report also contains nearly $16.3 million in proposed one-time transfers from special accounts into the General Fund. It no longer contains a proposed transfer from the Douglas J. Johnson Economic Protection Trust Fund — that provision has been moved into the omnibus tax bill (HF42).