Shutdown Ends: Budget Details Revealed

By KBJR News 1

July 20, 2011 Updated Jul 20, 2011 at 11:13 PM CDT

St. Paul, MN (Northland's NewsCenter) -- After an historic 20 day shutdown, Minnesota's government is finally back up and running. Governor Mark Dayton signed the state's two year budget into law Wednesday morning.

LeAnn Wallace has been following this for us since the legislative session came to an end without a balanced budget nearly two months ago, she has the details.

Lawmakers are relieved the shutdown cloud is no longer looming overhead, whether they agreed with all of the budget specifics or not. They all wanted to see the shutdown end.

Governor Dayton called lawmakers into a Special Session Tuesday after five days of finalizing a budget agreement with the state's Republican leaders.

Legislators worked until 4 a.m approving the nine budget bills and three other spending bills.

And with the stroke of Governor Mark Dayton's pen...the two–year $35 billion budget was signed into law, and Minnesota's government shutdown was over.

Although it wasn't the budget solution that he wanted, Governor Dayton said he saw no other compromise in the near future.

"It was imperative that somebody step forward and make an offer that would break the ice and get Minnesota back to work and I did so, recognizing in my view, the serious shortcomings in the likely outcome."

Among his disappointments with the budget, no tax hikes for the state's top wage earners.

"What's not in the bill that is my major disappointment is a progressive source of tax revenue to pay for these expenditures."

“You can’t control government spending unless you change how it operates,” said Speaker of the House Kurt Zellers R - Maple Grove.

“This budget accomplishes what we set out to do: it does not raise taxes, cuts projected spending by $2.5 billion and bends the cost curve of unsustainable state spending. Our economy will be stronger as a result of not increasing taxes on businesses and job creators,” said Zellers.

While the Governor wasn't happy with everything included in the bill, Republicans also had to concede some ground on policy issues that did not make it into the budget.

Those include a ban on stem–cell research and abortion restrictions.

A bonding bill was also part of the deal.

That agreement was made last week, also much to the dismay of the GOP, who said they didn't want anymore spending.

The Governor however said the near $500–million bonding bill will create thousands of additional construction jobs across the state.

Highlights of the Fiscal Year 2012-2013 General Fund Budget"

Health Care: $11.3 billion

● Phase out with complete repeal of the 2.0% MinnesotaCare Provider Tax in 2018.
● Defined contribution program to provide a subsidy for adults without children at above 200% federal poverty guidelines in
MinnesotaCare to purchase private health care coverage.
● Welfare reform that strengthens eligibility requirements and enhanced restrictions to prevent fraudulent use of electronic benefit transfer cards.
● Reduce the cost curve in health and human services spending from a projected increase of 22% in the next biennium to 4.8%.

Education: $13.6 billion

● $50 added to the per pupil funding formula in each year of the biennium
● Special education funding at current level, an 9% increase over the biennium
● Teacher and principal evaluation
● Repeal of the January 15 negotiation deadline and penalty
● Prohibiting the state from tapping into school district reserves for cash flow.

Taxes: $2.9 billion

● No income tax increases.
● Provided tax incentives for job creation focused on development of data centers.
● Increase of $30 million for Property Tax Refund.
● Local government aid at FY10 levels for all cities with
permanent statutory reductions.
● Restored estate tax to allow small businesses and farms to stay in the family.
● Market Value Homestead Credit converted to Market Value
Homestead Exclusion.

State Government Finance: $818.9 million

● Increased spending for Veterans Affairs and Military Affairs by 2.7% and 6% respectively.
● Reduced funding for constitutional offices, the legislature, and state agencies by 5%.
● Consolidated Office of Enterprise Technology services throughout government
● Required E-Verify status check to be used by all businesses that contract with the state
● Established a Sunset Advisory Commission to review state agencies, improve operations, and consolidate programs
● Linked state employee pay to performance, with salary increases subject to sufficient ratings
● Issued up to $10 million in appropriated bonds through MN Management & Budget in a “pay for performance” pilot project with cost efficient non-profits
● Audits to verify dependent eligibility in the state employee
health insurance program.
● Strategic sourcing to ensure efficiencies in government
purchasing.
● Tax analytic and business intelligence to better collect state taxes and debts.

Higher Education: $2.565 billion

● $1.09 billion for the University of Minnesota and $1.09 billion for the Minnesota State Colleges and Universities (MnSCU).
● Increase in funding for the state grant program and work study.
● Tuition cap of 4% at MnSCU two-year institutions in 2013.

Jobs and Economic Development: $170.3 million

● Increased funding used to off set previous reductions to
employment and housing programs for the extremely poor, mentally ill and disabled.
● Key investments in economic development funds that help
Minnesota compete with other states when attracting new businesses.
● Workforce Development Competitive Grant Program to achieve accountability and outcomes for state dollars invested in grant programs for business development and adult services.

Judiciary/Public Safety: $1.807 billion

● Minimized reductions to core constitutional services like
courts, cops and corrections.
● Require prison inmate co-pay for inmate-initiated health care
visits.
● Saves counties money by allowing them to reimburse costs of medical services to local prisoners at the Medical Assistance rate, rather than the negotiated provider rates.
● Provide Safe Harbors to juveniles sold into prostitution and sex trafficking by treating them as victims, not criminals.

Transportation: $125.7 million

● Funding focuses on preserving current transportation and transit systems.
● Improves transit financing and transparency by requiring transit corridor planners to provide the total cost of proposed transit system, including capital and long-term operating expenses.

Environment, Energy and Natural Resources: $252.704 million

● Game and Fish bill provisions
● NPDES permits required only as directed by federal law
● Funded priorities including emerging issues such as aquatic invasive species and chronic waste disease.

Agriculture: $76.601 million

● Prioritizes funding to maintain the integrity and safety of the
food supply in Minnesota.
● No reduction in funding for retail food handling and meatpacking inspections.

Bonding: $497 million

● Projects targeted at roads and bridges, infrastructure and flood
relief.