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Viewpoint: State faces the effect of three rounds of cuts

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opinion Woodbury,Minnesota 55125
Woodbury Bulletin
Viewpoint: State faces the effect of three rounds of cuts
Woodbury Minnesota 8420 City Centre Drive 55125

Minnesotans have been hearing a great deal about budget cuts for well over a year. Now, as Gov. Pawlenty proceeds with his current unallotment plans, it's important to consider these proposed cuts along with the specifics of last December's unallotments and this year's budget bills.


Consideration of the three phases of cuts provides a clearer picture of the focus and extent of the cuts. Please note that the percentage cut from the forecasted budget for each item is included in parentheses.

December 2008 Unallotment:

In 2008, the state's November Forecast revealed an unanticipated $426 million deficit for the current biennium (FY 2008-09). The unallotment statute was designed to allow the governor to act alone when the legislature was not in session to address such shortfalls.

By law, the governor had to use any remaining funds in the state's budget reserve (then $155 million) prior to unalloting programs.

In late December, the governor unalloted primarily from the following three categories to address the remaining gap:

• $110 million (3.5 percent) from aids and credits to counties ($66 million) and cities ($44 million).

• $73 million (0.8 percent) from human services, including program such as mental health grants, medical assistance waiver programs and housing grants.

• $40 million (1.3 percent) from our state's colleges and universities.

During this same period, the legislature voluntarily reduced its budgetby $2.2 million (1.5 percent), from the limited funds remaining in that current biennium; this required significant staff reductions.

2009 Budget Bills:

In the 2009 legislative session, the Legislature passed a balanced budget bill that contained $2 billion in cuts along with cost-saving reforms, payment shifts, and new revenue to address a $4.6 billion deficit ($6.4 without federal stimulus dollars).

The governor's initial proposals contained only $1.5 billion in cuts but greater one-time borrowing to balance the budget. The forecasted general fund budget had been $34 billion.

Budget bills passed and signed into law in 2009 included the following cuts:

• $500 million (3.6 percent) from E-12 was cut but replaced in total by federal stabilization funds.

• $200 million from higher education ($137 million was replaced by federal stabilization funds, so the net cut was a little over $62 million (6.3 percent)).

• $929 million from Health and Human Services ($110 million was replaced by federal stabilization funds, so the net cut was almost $820 million (9.1 percent)).

• $7.9 million (3.0 percent) from agriculture and veterans spending.

• $17.7 million (4.7 percent) from environment and energy spending.

• $17.3 million (6.0 percent) from economic development spending.

• $17.3 million (8.2 percent) from transportation spending.

• $52.5 million from public safety spending ($38 million was replaced by federal stabilization funds, so the net cut was $14.5 million (2.8 percent)).

In addition to these cuts, at the end of the 2009 legislative session, the governor vetoed the General Assistance Medical Care (GAMC) for single adults with incomes of less than $8,000 per year, producing additional savings to the state budget of $381 million.

Summary of governor's Unallotment Plans for 2009:

The session ended with the governor's signature on our appropriations bills but a veto on the revenue bill that contained both $1 billion in revenue and $1.7 billion in delayed education payments.

The Legislature's rejection of additional borrowing proposed by the governor, and Gov. Pawlenty's veto of the revenue bill left a huge $2.7 billion budget gap that he will use unallotment powers to address.

The governor's unallotment recommendations for 2009 include the following budget cuts:

• Nearly $236 million (2.5 percent) in additional cuts to health and human services

• $100 million (2.9 percent) in additional cuts to higher education appropriations

• Over $300 million (8.7 percent) in additional cuts to local government aid to cities and counties

• $1.77 billion (13.2 percent) in K-12 education payment deferrals and adjustments

The Legislative Advisory Commission was scheduled to meet again at the State Capitol on Tuesday, June 30 to discuss Gov. Pawlenty's unallotment plan.

A future "Viewpoint" will address specific impacts of the cuts on our communities.

Bunn (DFL-Lake Elmo) represents District 56A in the Minnesota House of Representatives. She can be reached at (651) 296-4244, by mail at 521 State Office Building, 100 Martin Luther King Blvd., St. Paul, MN 55155 or via e-mail at