2011 Week
Vol. 3 No. 5
Senate Republican Budget Doesn’t Add Up
Senate Republicans pushed near-
ly every budget-balancing bill
through the committee process
and the full Senate during the
past two weeks. Only two bills
– the tax bill and transportation
budget – remain to be voted upon
before negotiations can begin
with the House.
While the details of each budget
proposal are very disturbing,
Senate Democrats expressed the
most frustration over the fact that
the budget proposals do not come
close to solving the state’s $5 bil-
lion budget deficit, a goal Repub-
lican leaders have vowed to make
their top priority in 2011.
Rather than making the tough
choices necessary to eliminate
the $5 billion with budget cuts
alone, the Republicans’ budget
relies on unsubstantiated, unreal-
Senate DFL Research
in Review
istic savings estimates to “solve”
about $1 billion of the deficit.
In the Health and Human Ser-
vices budget, $603 million is
estimated to be saved by ask-
ing the federal government for
a waiver on Medicaid coverage
requirements. In addition to
eliminating health coverage for at
least 100,000 adults and children,
Experts at the state and federal
level have said this waiver is not
legal, yet the savings are counted
in this bill.
The State Government Bud-
get Bill includes $217 million
in invented money, estimating
cost-savings for improving the
way the state purchases goods
and tracks tax compliance. State
agencies, however, said it’s unre-
alistic to believe the state could
save anywhere near $217 million
85 State Office Building
March 31, 2011
because Minnesota already is
a national leader in these types
of efficiencies. In addition, the
same bill cuts the state workforce
by 15%, eliminating the support
staff that would be needed to
actually increase tax audits and
compliance efforts.
Republicans ignored the advice
of fiscal experts and, instead
relied on third-party savings
estimates that were provided by
corporations such as IBM and
Accenture. Senate Democrats
strongly objected to private
companies being allowed to push
their own agendas by shaping the
state’s finances. Governor Mark
Dayton admonished the fiscal
reporting used for this budget and
insisted he will not negotiate on a
bill that doesn’t even balance.
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 Working Minnesotans asked to balance $475 million of state budget
The state government budget took
one of the biggest hits in the Re-
publicans’ budget: 53.3%. Rather
than focusing on reforms and
efficiency, as promised, the budget
that passed with full support of
Republicans on Thursday achieves
these spending reductions by raid-
ing the pockets of tens of thou-
sands of working Minnesotans.
The bill eliminates health insur-
ance for state employees and,
instead, offers high-deductible
Health Savings Accounts that
would cost each employee at mini-
mum of $2,800 to $6,200 every
year. The budget also imposes a
two-year salary freeze on state
employees, something that most
public employee groups have ac-
cepted during collective bargaining
negotiations. This bill ignores that
important process. Finally, the bud-
get imposes a 15% state workforce
reduction that would eliminate one
of every six workers in the state.
With Minnesota already boasting
the 10th-leanest public workforce
in the nation, these types of deep
cuts will have a noticeable effect
on the ability of state agencies
to provide every-day needs such
as snow-plowing, flood control,
tax-return processing, nursing care,
public safety, etc.
Senate Democrats offered amend-
ments to exempt the following
employees from the workforce
reduction, arguing they repre-
sent some of the most critical
staff that support the health and
safety of Minnesota: Nurses, Mn/
DOT transportation generalists
(including snow-plow drivers,
bridge inspectors and employees
being asked to respond to current
flood emergencies), corrections
staff with high levels of offender
contact, and military and veterans’
affairs staff.
Senate DFL Research
The amendment to exempt military Besides the middle-class attacks
and veterans’ affairs staff prevailed included in this bill, Senate Demo-
unanimously. The exemption for crats also objected to the fact that it
corrections officers prevailed, even falls $217 million short of the sav-
though 20 Republicans voted, ings needed to balance the budget.
‘no.’ Nurses and Mn/DOT critical Republicans ignored testimony of
employees are still subject to the multiple non-partisan fiscal experts
cuts because Republicans stood and agencies and, instead, relied
together to reject protections for upon third-party savings estimates
those staff. that were provided by corporations
such as IBM and Accenture. One
Senate Democrats also offered an
DFL Senator said this is like telling
amendment to remove the high-de-
the state to set up lemonade stands
ductible HSA and retain the current
to raise money having Lipton
state employee health plan, avoid-
report how much money could be
ing a massive pay cut for workers
raised – It’s unrealistic, lacking
who would be paying outrageous
in detail and unlikely to capture
premiums. The change would
enough money to solve the state’s
have been paid for by closing tax
problems.
loopholes for corporations, ensur-
ing businesses aren’t ducking out Governor Mark Dayton admon-
of tax responsibilities. This amend- ished the fiscal reporting used for
ment was illogically ruled out of this budget and insisted he will
order, a ruling supported by every not negotiate on a bill that doesn’t
Republican Senator. even balance.
GOP Cuts to Jobs and Economic Development
The Jobs and Economic Growth bill was heard on the Senate floor
this week. Much of the conversation was focused on raiding $45 mil-
lion from the IRRRB Doug Johnson Fund. This fund is paid for by a
taconite production tax in lieu of property taxes. Before this session,
the legislature and Governor have never used local property taxes to
balance the budget.
The raiding of $45 million from this dedicated fund represents 70%
of the total $65 million cut to the Department of Employment and
Economic Development (DEED), Department of Labor and Industry
(DOLI), Housing Finance Agency and Explore Minnesota which all
are under the purview of the Jobs and Economic Growth Committee.
The bill also changes how DEED awards grants. In previous years
some programs (Boys and Girls Club, Deaf and Hard of Hearing In-
terpreters, Youthbuild, Lifetrack Resources, etc.) have had line items
for funding but this legislation would lump them all into block grants.
Additionally, these newly formed block grants these groups are com-
peting for will be cut by $2.616 million.
85 State Office Building 296-4113
 Higher
Republicans Pass Deep Cut to Schools Education Cuts
Republicans in the Minnesota Senate today approved a bill that cuts fund- In a Republican-led party-line
ing for Minnesota schools by $35 million, including deep cuts to special vote, the Senate voted to ap-
education and integration aid. The bill will force Minnesota schools to prove a higher education budget
teach 15,000 additional students while burdened with increasing costs and bill that slashes funding for the
testing requirements. The bill passed on a party line vote after DFL sena- state’s colleges and universities.
tors tried to amend the bill to safeguard educational quality in Minnesota
The GOP budget reduces the
The proposal would cut special education funding by approximately $118 University of Minnesota funding
million over the next two years. Minnesota school districts are already fac- by $243 million (19%) and cuts
ing a $647 million ‘cross-subsidy,’ the gap between the cost of providing $167 million (13%) from the
federally-mandated special education services and the amount they receive Minnesota State Colleges and
from the state to fund them. This cut would substantially add to district’s Universities (MnSCU) system.
special education deficit. This approach will set the fund-
Additionally, the bill eliminated integration aid, a move that will slash ing level for higher education
funding for the state’s most disadvantaged students and funnels this money back more than a decade. These
to schools that are already making the grade. The bill also repeals the de- deep cuts come at a time the
segregation rule. higher education system has
boosted its enrollment by more
Also included in the GOP’s school funding cut bill are provisions to limit than 70,000 students.
the collective bargaining rights of teachers and other public employees.
The bill imposes a pay freeze on every school district employee in the It is too early to know the exact
state, without any input from workers or local school districts. impact of a reduction of this
magnitude, but as the U of M
With these sweeping legislative changes, Republicans are giving Minne- and MnSCU work to soften the
sotans the wrong impression that the salaries of teachers, special educa- impact on tuition, universities
tion professionals, janitors, and lunch ladies are responsible for the budget and colleges will likely see fac-
problems facing our schools. In reality, salaries for Minnesota teachers are ulty and staff reductions, enroll-
already 2% below the national average and low starting teacher salaries ment caps, reductions in the size
create a disincentive for our best and brightest students to enter the class- and scope of course and program
room. The salary freeze is a simplistic approach to the complex budget offerings and reductions in stu-
crisis. Simply freezing the salaries of teachers, janitors, and lunch ladies dent services.
does nothing to address the true challenges facing our schools, does noth-
ing to alleviate our budget deficit, and handcuffs Minnesota’s local school Beyond the impacts on cam-
districts. puses, Minnesotans will also feel
these cuts statewide. In order
to attract new businesses to the
state, Minnesota needs to offer
Special Funds and Workers’ Compensation Risk highly trained and skilled work-
ers. As U of M President Robert
Plan Profits Backfills the Commerce Budget Bruininks told the Senate Higher
The Commerce Committee arrived at their $31 target by taking fund Education Committee earlier
balances from special revenue accounts such as License Technology this year, “If Minnesota wants to
Surcharge, Insurance Fraud Prevention Account, Auto Theft Prevention continue to be a state with low
Account and a real estate account to protect consumers from fraudulent unemployment, a state with vi-
real estate transactions. brant industries that can compete
In addition to raiding special fund balances, there is criticism surrounding in the 21st century; we are going
taking profit funds from the Workers’ Compensation Assigned Risk Plan to have to take a hard look at
balance. These budget funds capture $26.18 million, the bulk of their $31 this. Higher education is going
million target. to have to be a priority. It can’t
be in the back room. It can’t be
The largest actual cut to the budget is to Administrative Services of $1.5 way down the list of priorities.”
million which is about 1/3 of their budget. The cut represents a reduction
of approximately 12 full time employees out of a staff of 37 employees. The next step for this legislation
will be conference committee.

Senate DFL Research 85 State Office Building 296-4113

 Senate GOP Health Care Cuts Hit Seniors, Disabled, Vulnerable Kids
Senate Republicans approved a bill
this week that makes deep cuts to
the state’s health care safety net,
jeopardizing care for more than
100,000 Minnesotans and slash-
ing funding for the state’s nursing
homes and in-home care programs.
A few of the bill’s provisions
include:
· Repealing the early expan-
sion of Medicaid signed by
Gov. Dayton earlier this year, a
move that jeopardizes care for
95,000 poor and sick Minneso-
tans along with 20,000 related
health care sector jobs.
· Putting thousands of low-
income Minnesotans into
unrealistic and unaffordable
high-premium, high deductible
private insurance plans.
· Forcing 200 “frail elderly”
from the community into more
expensive nursing homes, and
more than 800 Minnesotans
into institutionalized care.
· Eliminating optional services
for Medical Assistance and
MinnesotaCare recipients,
including chiropractic, podia-
try, therapies, eyeglasses, and
prosthetics.
· Cutting funding for child care
and adoption grants, prescrip-
tion drug assistance, mental
health crisis grants, develop-
mental disability family sup-
ports, children’s mental health
screening, family planning and
more.
· Eliminating state loan forgive-
ness programs for medical
training that ensures Min-
nesota’s ability to recruit and
train doctors and dentists in
geographically underserved
parts of the state.
Senate DFL Research
Senate Democrats strongly op- level research that seeks cures for
posed the bill, arguing that the devastating diseases. Putting this
bill’s plan to put low-income peo- provision into law will place a
ple into high-deductible plans is chilling effect on Minnesota’s bio-
not realistic: on their incomes they science industry and jobs. Changes
cannot afford the high premiums to the state’s newborn screening
and deductibles offered under pri- program will remove parental con-
vate health insurance plans. More trol of their children’s records, and
likely they will opt for no coverage inhibit Minnesota’s ability to make
at all – and end up in expensive sure parents of children with seri-
hospital emergency rooms, with ous health conditions are linked to
all Minnesotans footing the bill. necessary treatment options.
Senate Democrats believe the bill
The bill was approved along a
unfairly targets the poor, the sick,
party-line vote, and faces a likely
the elderly and the disabled.
veto. Governor Dayton has prom-
The bill also contains a contro- ised he will veto any bill that
versial ban on human cloning that includes the repeal of Early Medic-
criminalizes cutting-edge, cell aid enrollment.
Agriculture Bill on its Way to Governor
The Omnibus Agriculture and Rural Development Finance Bill is on
its way to the governor. The bill passed 104-20 by the House, two
days after it was passed 39-25 by the Senate.
In total, the bill would appropriate nearly $79 million over the next
biennium, with $76.6 million coming from the General Fund. Many
of the funding proposals include the same appropriations recom-
mended by Gov. Mark Dayton, such as completing more than $13
million in delinquent ethanol payments to qualified producers.
The majority of the $12 million reduction from the Department
of Agriculture is a cut to the appropriation for ethanol producer
payments and to the AGRI Program. The remaining and ongoing
funding in the AGRI Program for ethanol payments is dedicated
and includes grants, loans or other forms of financial assistance to
livestock producers, bio-energy awards and other financial assistance
to support other rural economic infrastructure activities.
The bill includes funds for the Agriculture Utilization Research
Institute and allows the department to inspect responsible users of
anhydrous ammonia less frequently so inspectors can concentrate on
repeat offenders more diligently.
Finally, the bill increases funding to hire additional retail food han-
dler inspectors to deal with a 40% backlog of inspections. A progress
report would be due to the Legislature by Feb. 1, 2013.
85 State Office Building 296-4113
 Senate GOP Budget Bill
Senate GOP Votes to Eliminate Crime Threatens State Parks
Prevention Grants, Cut Firefighter Training and Water Quality
This week, Republicans in the Minnesota Senate approved a public The Republican-controlled Min-
safety budget bill that eliminates critical crime prevention grants, nesota Senate has approved deep
slashes funding for firefighter training, and cuts in half state funding spending cuts to the state’s en-
for the Department of Human Rights. vironment and natural resources
The Republican approach to the budget is irresponsible and short- agencies. The budget bill, ap-
sighted. The public safety budget proposal puts political priorities proved on a party-line vote, would
over what is best for Minnesota, and it eliminates programs that reduce services at dozens of state
protect Minnesotans and passes costs on to local governments parks, and could lead to up to 10
parks being mothballed over the
Key provisions in the GOP-backed bill: next two years.
• The bill eliminates the Community Crime Prevention Grants In order to achieve their all-cuts
program, which supports community-based crime prevention budget, Senate Republicans’ legis-
programs across the state, many of which are targeted to at-risk lation will cut funding for Environ-
youth. ment and Natural Resources by
• The bill cuts $6.5 million out of the Fire Safety Account, which 15%. These cuts will likely result
pays for local fire departments’ firefighter training. in a slower environmental permit-
ting process. The GOP spent the
• The bill would cuts probation officers in all 87 counties by
first month of session attempting
reducing DOC Community Services funding by 4%, resulting in
to speed up the environmental
less supervision for offenders who are released from prison and
permitting process in an effort to
living in our communities.
help businesses. These cuts to
• The measure would halve state funding for Minnesota Human the DNR and Pollution Control
Rights Department, a neutral state agency that investigates Agency (PCA) will likely erase
charges of illegal discrimination. any changes made to improve the
permitting process. If legislators
• The bill cuts Civil Legal Services by 6.5%, which will greatly
want to speed up the process, the
affect the services they are able to offer low income Minnesotans
state needs to give the agencies the
on family law, housing and domestic violence cases.
proper funding to get the job done.
• The bill cuts Guardians ad Litem by 8% - the people who
Beyond budget reductions, the
advocate in court for the best interests of abused and neglected
Senate’s legislation also includes
children.
several controversial policy
“The Legislature faces many tough choices changes. Ranging from a two-year
this session, but cutting funding for crime moratorium on water-related rule
prevention and public safety programs will making to lowering standards
only cost us more in the future in higher on Lake Pepin, the Republican’s
court and incarceration costs. It’s clear that policy changes could have last-
the Republican’s all-cuts approach is going ing affects on Minnesota’s water
to have severe, dangerous consequences for safety.
our state, and Minnesotans deserve better.”
-- Sen. Ron Latz

Senate DFL Research 85 State Office Building 296-4113

 What’s Happening in the House
House passes Omnibus Tax Bill.
The bill decreases lower and middle
individual income tax rates from
their current levels of 5.35% and
7.05% to 4.75% and 6.75%, phased
in over three years. The proposed
phase-out of local government aid
to Minneapolis, St. Paul and Duluth
would end the LGA program and
have a substantial impact on com-
munities with low tax bases and
will raise property taxes
Committee approves restructur-
ing agricultural appropriations.
The House Ways and Means Com-
mittee approved an amendment to
reduce proposed ethanol producer
payments by nearly $2 million and
to shift those appropriations among
other agricultural programs that had
been targeted for 15% budget cuts.
Jobs bill sent back to taxes. To
meet the goal of a 58.3% reduction,
the bill would use $76.3 million
in one-time revenues (including
the $60 million Doug Johnson
trust fund transfer). By doing so, it
would whittle the 58.3% cut down
Senate DFL Research
to just 6.2% of actual reduced Gen- Omnibus higher education
eral Fund spending. finance bill approved by House.
Tuition would go up, funding levels
Jobs bill headed to House floor.
would drop to levels not seen in
The omnibus jobs and economic de-
more than a decade and top offi-
velopment finance bill is headed to
cials’ salaries could go down.
the House floor, including a contro-
versial provision to transfer money Bill would close DNR loophole.
from an Iron Range trust fund. Several provisions in a game and
fish bill vetoed last year by former
Agriculture bill is on its way to
Gov. Tim Pawlenty are back this
the governor. The omnibus agricul-
year.
ture and rural development finance
bill is on its way to the governor. No need to add home fire sprin-
klers. The House passed a bill
Two omnibus bills merged into
that would prevent state building
one. A House committee merged
code, fire code or other subdivision
the omnibus public safety and judi-
codes from requiring installation of
ciary finance bills into the Senate’s
sprinklers.
combined version of the appropria-
tions. House public safety and judiciary
omnibus bill. This bill includes
House passes omnibus environ-
deep cuts to the Department of Hu-
ment bill. The House passed the
man Rights and Civil Legal Ser-
Omnibus Environment, Energy and
vices along with other public safety
Natural Resources Finance bill after
and Department of Corrections
approving several amendments,
spending. The GOP also included
such as removing a provision to
a transfer of $8.5 million from the
allow the harvesting of hardwood
Fire Safety Account to the General
trees in two state parks.
Fund.
85 State Office Building 296-4113