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MINNEAPOLIS (WCCO) --The Twin Cities homeless are banding together to fight back against
health care cuts. For weeks, they've been telling their stories to
camera crews across the metro. They're hoping their message on YouTube
will get Minnesota Governor Tim Pawlenty's attention.
It looks much different than the discussion did at the state Capitol,
or the one going on in Washington. But, on the streets of Minneapolis
the health care conversation is no less important.
Josh Lange is the Human Rights Program Director at St. Stephen's in
Minneapolis. The group has been interviewing the Twin Cities homeless
for weeks. Full Story Watch Video
By Rep. Erin Murphy For decades, Minnesotans have worked to create an inter-connected
system of services that help residents with disabilities live full and
independent lives. Despite the record budget shortfall this
year, the Legislature sought to maintain support for these critical
services. We passed a strategic health care bill to reduce spending
($540 million) but with 24 percent less in cuts to disabled and
long-term care services than were proposed by the governor.
Unfortunately, the governor has used unallotment to make nearly the
same level of cuts as he originally proposed.
Here is a partial list of the governor’s choices: Children
and adults with developmental disabilities: Developmental disability
waivers are used by Minnesotans whose needs increase due to conditions
such as Alzheimer’s disease or diabetes. The governor’s $6 million cut
— on top of the cut already passed by the Legislature — will be
devastating to small-group home providers and reduce the number of
Minnesotans with developmental disabilities who can be served in the
community. Senior citizens who are ill: The governor cut $5.3
million in funding for medically prescribed diets for poor seniors who
are ill. This program provides cash supplements to 28,700 Minnesotans
older than 65 with disabilities. Full Story
By Chris Williams, Associated Press MINNEAPOLIS - Some of Minnesota's largest public hospitals are
preparing to trim heavily used programs and services as state budget
cuts and soaring costs for treating the uninsured threaten to leave
them millions of dollars short.
"We are looking at services that have been a tremendous benefit to
the community that we can no longer do," said Mark Bernhardson,
chairman of the board at the Hennepin County Medical Center in
Minneapolis. "It's not a pretty picture."
Everything from chemical dependency and mental health programs to
burn units, specialized trauma teams and education programs for new
doctors could be trimmed. Metro hospitals could restrict service to
patients from outside their home counties. Layoffs seem inevitable. Full Story
by Mark Sommerhauser Winona County leaders may question the legality of Gov. Tim Pawlenty’s
decision to unallot $2.7 billion from Minnesota’s budget. Commissioner
Dwayne Voegeli wants the county to ask Minnesota Attorney General Lori
Swanson for a legal opinion on Pawlenty’s unallotment decision, which
balanced the state budget by cutting funding for counties, cities and
health care programs. If the Winona County board approves such a
resolution, it would become the first county board in Minnesota to do
so, County Administrator Bob Reinert said.
Voegeli said the issue isn’t about politics, but about
defining the authority of Minnesota’s executive branch. “A
lot of people are hoping and assuming that someone else puts this out
there,” Voegeli said. “So why not little Winona County? Someone needs
to.” Minnesota governors previously used unallotment to balance
the state budget, but only to account for unexpected shortfalls when
tax collections fell short of projections. Pawlenty unallotted funds
after he couldn’t reach a budget deal with DFL lawmakers, and later voiced confidence that he’s on sound legal footing. Full Story
By Amy Merrick, July 11, 2009 With a handful of states struggling to finish their budgets, Minnesota
Gov. Tim Pawlenty was adamant about closing his state's $2.7 billion
deficit without raising taxes. After vetoing the Democratic-led legislature's bill that called for
$1 billion in tax increases, the Republican governor took matters into
his own hands. Instead of calling a special legislative session, he
hacked at the budget himself, employing an unusual and rarely used
"unallotment" law to cut Minnesota's two-year general-fund spending to
$31 billion. State agencies began detailing their cuts this week.
The move isn't sitting well with some of Mr. Pawlenty's
constituents. Religious leaders organized a protest, a lobbying
association for cities considered suing him, and the state
Democratic-Farmer-Labor party criticized him for making an end-run
around lawmakers. Full Story
by Martiga Lohn, Associated Press
St. Paul, Minn. — Just a few months ago, Gov. Tim Pawlenty argued that
manufacturers should be exempt from paying sales tax on major equipment
purchases. Now, as part of his $2.7 billion deficit fix, he's going to hang on
to their cash longer.
The Republican governor will delay $63 million worth of sales tax refunds for
capital equipment purchases starting in January 2011.
Businesses will wait an extra three months for their cash, as part of
Pawlenty's plan to balance the state budget using executive powers.
The move isn't sitting well with manufacturers who counted Pawlenty as an
ally.
"I consider Gov. Pawlenty a friend of manufacturing, and this is not
something that I would have expected him to do," said Mike Yeager, a
manufacturer in Norwood Young America who recently spent $445,000 on equipment
and will apply for a sales tax refund of nearly $30,000.
"It would have been nice if I hadn't had to come up with this extra money,"
he added.
Pawlenty even devoted part of his State of the State speech to the issue:
"Companies shouldn't have to do a bunch of paperwork so they can qualify for a
bureaucratic rebate from the sales tax they pay on equipment," he said in
January. "Let's just give them a 100 percent exemption from the sales tax --
right away when they buy the equipment."
The governor also pushed for the change when he presented a budget proposal
later that month, saying it was part of a package that would spur small and
medium-sized businesses to hire workers and make investments. But the effort ran into problems as the state faced a mammoth budget
shortfall. The equipment exemption was in the Democratic-controlled
Legislature's tax bill, which Pawlenty vetoed because it would have raised taxes
on high incomes, alcohol and credit card companies.
Senate Taxes Committee Chairman Tom Bakk, one of several Democratic
candidates for governor, said Pawlenty couldn't follow through on his proposals
for business tax breaks.
"He didn't have the money to pay for it," said Bakk, DFL-Cook.
Pawlenty spokesman Alex Carey said the delay isn't without precedent -- the
state delayed $50 million worth of capital equipment sales tax refunds in 2003
as part of a deficit deal.
This time, Carey said the delay will affect 600 refunds with an average delay
of 45 days, and all refunds will be released in July 2011.
"A short delay in a relatively small number of the refunds is a fiscally
prudent action," Carey said, adding that Pawlenty still wants to get rid of the
bureaucratic refund process.
Minnesota law requires businesses to pay the state sales tax of 6.875 percent
on heavy machinery and equipment used in manufacturing and mining, such as the
new $241,000 mill machine Yeager bought last month.
To get refunds, businesses must file forms with the state Department of
Revenue. They don't get interest unless it takes more than 90 days to process a
completed application.
Revenue Department spokeswoman Lynn Andrews said the average refund takes 55
days. When the delay takes effect, companies will wait five to six months for
their refunds.
"It's a no-interest loan to the state, and that's wrong, I think," said Dave
Fiedler, president of the Minnesota Precision Manufacturing Association and
president and chief operating officer of Checker Machine in New Hope.
If the economy recovers slowly, Fiedler said the longer wait for refunds
might force some businesses to delay big equipment purchases to keep their cash
in hand, since many manufacturers are currently operating on slender profit
margins.
"Cash is king and we need all we can get," he said. "We need those rebates."
Yeager recalled making a case to eliminate the refund paperwork when he met
Pawlenty at a manufacturers meeting in Brainerd in early 2008. He said he told
the governor it was "the most insane law I've ever seen," and that Pawlenty
agreed.
(Copyright 2009 by The Associated Press. All Rights Reserved.)
By Britt Robson, Special to Capitol Report
July 6, 2009
The most significant chunk of money that
Gov. Tim Pawlenty is “unalloting,” or erasing, to balance the 2010-2011
budget is the $1.7 billion K-12 cost shift.
The question is: Just how does it work — and how will schools feel the pinch?
The upcoming cost shift means that approximately a third of the
money schools need to operate won’t be forthcoming for a few months,
postponing the obligation for budget purposes into the next fiscal
biennium.
“It’s the same as if your boss showed up on August 1 and said,
‘I’m not going to pay you until January 1, but I promise you’ll get it
then,’” says John Thein, superintendent of School District 623 in
Roseville. “There’s a cost, let’s be honest,” Thein says. “We have an $85
million budget and if we have to borrow 30 percent of what comes
through from the state, that’s about $300,000 in interest. Every
district has a little different financial situation and cash flow. The
people who are really going to come out ahead are the organizations
that help schools finance short-term bonds.” Full Story
by Lori Sturdevant, Star Tribune, July 1,
2009
On Wednesday, Gov. Tim Pawlenty
officially approved a package of unilateral spending cuts and payment delays
totaling $2.7 billion over the next two years.
That's possible, Pawlenty contends,
because of the "unallotment" authority granted to the executive branch in
statute. His exercise of that authority has been much disputed by the DFL
leaders of the legislative branch, who consider the Republican governor's action
an unconstitutional power grab. Meeting as the Legislative Advisory Council on
Tuesday, they officially but futilely registered their protest, approving a
resolution calling unallotment "unwise."
Stopping unallotment would require
the intervention of the third branch of government, and that requires a lawsuit.
The Legislature itself likely lacks legal standing to make that move, since it
has no financial stake in Pawlenty's action. Whether any entity that has funds
at stake is preparing a suit is not known -- but given the amount of money
involved, it's likely. Full Story
By Joe Kimball, MinnPost, June 24 2009
A wide-ranging group of religious organizations is decrying the proposed unallotment budget cuts planned by Gov. Tim Pawlenty and has urged him not to “impose even greater hardships on those among us who are struggling to live.”
To push the issue, many sponsoring organizations are calling for "A Witness of Lament" prayer parade Tuesday morning, so "Minnesota people of faith can gather for a witness of lament to urge Governor Pawlenty not to abandon Minnesotans, especially those most in need."
They say: "As people of faith, we can send the message that this is not the Minnesota we are called to be. It is against the teachings of all our religious traditions. We can remind Governor Pawlenty that he is Governor of all the people and plead for his care for all."
They plan to meet at Christ Lutheran Church on Capitol Hill, 105 University Ave., St. Paul, at 10:15 am., and assemble in congregational groups. they then will move in a somber, funeral-like procession beginning at 10:30 am. Participants are being encouraged to wear black and bring flowers and notes to the governor expressing faith-based concerns about these budget decisions. The marchers will go down Martin Luther King Boulevard then gather on the south steps of the Capitol.
Sponsoring organizations are: the Minnesota Council of Churches, the St. Paul Area Council of Churches, the Greater Minnesota Council of Churches, the Joint Religious Legislative Coalition, the Interfaith Children’s Advocacy Network, the Minnesota Catholic Conference and A Minnesota Without Poverty.
In a notice about the effort, the groups note that Minnesota Catholic bishops wrote to Gov. Pawlenty before his unallotment announcement, saying:
"...we are compelled to speak with and for those among us whose voices are not always heard, and whose lives are oftentimes devalued. We are gravely concerned that our state’s unbalanced budget for FY 2010-11 will be resolved by further eliminating critical services for Minnesotans with urgent needs. We fear that additional spending reductions to beneficial health care and human services programs will have detrimental consequences for those who are poor and vulnerable, and ultimately to our state.
“We understand that the challenges facing our state are monumental and unprecedented. However, Minnesota must not become a state where people are viewed as burdens, and merely treated as cogs in our state’s economy. Instead, every state policy and program, including our state’s budget, must uphold the inviolable human dignity, value and worth of every person in Minnesota.”
Alas, the groups note, the unallotments included $236 million in the area of Health and Human Services (HHS): Twenty-eight of the 39 proposed unallotments are in the area of HHS, and 21 of the 28 HHS unallotments will take effect during the first year of the biennium, rather than the second, thereby leaving little, if any, time for the Minnesota Legislature to respond when it reconvenes in February.
"Who among us will suffer the greatest from the Governor’s unallotments? Governor Pawlenty’s unallotments fall disproportionately on our neighbors who are the poorest and most vulnerable – those among us who are struggling to meet basic needs. The $236 million in HHS unallotments are in addition to the $500 million in HHS cuts the Legislature made during session and the Governor’s $381 million line-item veto of General Assistance Medical Care (GAMC). The cuts, GAMC line-item veto and unallotments total $1 billion in HHS reductions for FY 2010-11 – more than 20 percent of Minnesota’s original $4.8 billion budget deficit!"
The groups list many worrisome effects, saying "the Governor’s line-item veto of GAMC and proposed unallotments ignore the human dignity of our poorest and most vulnerable neighbors, and will cause significant harm to those among us who we are called to place first. And, in turn, it will further weaken our state’s continual pursuit of the common good.
"Though the Governor’s plan includes several harmful unallotments, our greatest concerns are with the following seven proposed unallotments:
- 1. Elimination of Emergency Assistance: On November 1, 2009, two of Minnesota’s three Emergency Assistance programs will end: Emergency General Assistance (EGA) and Emergency Minnesota Supplemental Assistance (EMSA). These two critical safety-net programs provide needed assistance to Minnesotans who cannot fully support themselves, usually due to illness or disability, and who are facing an emergency that threatens their health or safety. Oftentimes related to imminent eviction, foreclosure or utility shut-off, ignored emergencies place our already struggling neighbors on the edge of homelessness. According to EGA and EMSA program guidelines, an individual is able to access emergency funds once per year. Minnesotans receiving EGA must be disabled or determined unemployable, and a single adult must have income less than $203 per month ($260 per month, if married); and recipients of EMSA must be 65 or older, blind or severely vision impaired, or disabled, and a single adult living alone must have income less than $735 per month ($1102 per month, if married and living alone).
- 2. Elimination of GAMC Coverage on March 1, 2010: Health insurance for “the poorest of the poor and the sickest of the sick” will end four months earlier than expected. When the Governor line-item vetoed GAMC on May 14, the program was slated to end on July 1, 2010. However, under the executive power of unallotment, GAMC will instead end on March 1, 2010. In the Governor’s GAMC veto message he told the legislature that because the program ends in the second year of the biennium, they would “have an opportunity to address this change further if it chooses.” This means that the Minnesota Legislature will have less than four weeks, after reconvening on February 4, 2010 to address the elimination of health care coverage for our 30,000 neighbors who are living at or below 75 percent of the Federal Poverty Guidelines.
- 3. Cutting Children & Community Services Grants: Children & Community Services Grants provide crucial funding for counties to purchase or provide social services for seniors, adults, children and families struggling with abuse and neglect, living with a disability, mental illness or chronic health condition, or living in poverty. Additionally, these grants provide services for: pregnant adolescents, adolescent parents and their children; adults who are vulnerable and in need of protection; people over the age of 60 who need help living independently; and people with developmental disabilities. The Governor proposes cutting Children & Community Services Grants by 25 percent during FY 2010, and by 33 percent during FY 2011. These grants fund a variety of critical services: adoption, case management, counseling, foster care for adults and children, protective services for adults and children, residential treatment, services for people with developmental, emotional or physical disabilities, substance abuse counseling, transportation, and public guardianship.
- 4. Lowering Medical Assistance (MA) Asset Limits for Parents and Eliminating MA Critical Access Dental Services: In order for parents to qualify for Medical Assistance (MA), health care services for low-income Minnesotans, they must be living at or below 100 percent of the Federal Poverty Guidelines ($22,050 for a family of four). On January 1, 2011, the MA asset limit for a single parent will decrease from $10,000 to $3,000, and from $20,000 to $6,000 for a couple. This unallotment completely undermines one of the six key challenges identified by the Legislative Commission to End Poverty in Minnesota by 2020 (LCEP). According to the LCEP, “Public assistance programs must work to move people toward financial self-sufficiency. Too often well-intentioned programs end up having the opposite effect, especially when they lead to asset depletion as a condition for participation. Further, eliminating funding for the Critical Access Dental Provider Program will severely harm the overall health and well-being of many low-income Minnesotans. Not only will many low-income and disabled Minnesotans lose access to dental care, but many Minnesotans will be forced to visit emergency rooms for untreated dental problems. In April 2010, the dental safety net that thousand of Minnesotans rely on could be eliminated.
- 5. Requiring the Health Care Access Fund to Fund Transitional MinnesotaCare and the Outreach Incentive Program: Transitional MinnesotaCare provides six months of coverage for low-income Minnesotans who are transitioning from GAMC to MinnesotaCare. Currently, the General Fund provides funding for the first two months of this program, and the Health Care Access Fund (HCAF) provides the remaining funding. The Governor’s proposed unallotment requires the HCAF to fund the entire six months of Transitional MinnesotaCare coverage. Beginning July 1, 2009, the HCAF will need to finance an additional, and unexpected, $37.5 million. The Minnesota Legislature created the HCAF in 1992 as a dedicated funding source for health care expansion. The HCAF is the primary source of funding for the MinnesotaCare program, which purchases health care for 118,000 uninsured, low-income, working families and adults each month. The General Fund also currently provides $3.4 million in funding for important community-based programs that help uninsured Minnesotans apply for public health programs. On July 1, 2010, the HCAF will also need to fully fund these important outreach programs. Over the next two years not only will the HCAF need to fund an additional $41 million for Transitional MinnesotaCare and the Outreach Incentive Program, but the HCAF will need to fund health care for an additional 30,000 former GAMC recipients.
- 6. Cutting Funding for Group Residential Housing (GRH): Group Residential Housing (GRH) Grants provide income supplements for room, board and other related housing services for Minnesotans whose illnesses or disabilities prevent them from living independently. There are more than 5,000 facilities in Minnesota serving people with developmental disabilities, mental illness, chemical dependency, physical disabilities, advanced age or brain injuries. Each month, 15,200 Minnesotans who are unable to live independently in the community are served through GRH. With an additional 5% cut to GRH, as is proposed by the Governor, facilities will likely be unable to continue providing the same level of services. There is also great concern that facilities will be forced to close. As a result, many low-income Minnesotans living with disabilities will be forced into homelessnes.
- 7. Cutting the Renter’s Credit (included in Tax Policy, Aids and Credits): Nearly 270,000 low and moderate income Minnesotans receive the Renter’s Credit – a tax refund that offsets a renters’ share of property taxes. More than half of the households receiving the Renter’s Credit have incomes of less than $20,000 per year, and approximately 28 percent of recipients are seniors and individuals with disabilities. The Governor’s unallotment would cut the Renter's Credit by more than a quarter; thereby substantially limiting both an important form of housing assistance and source of tax relief for many Minnesotans.
The groups say: "Our faith calls us to protect and support the life and human dignity of every person. We cannot stand silently by as the lives and well-being of our neighbors, who are already struggling to meet their basic needs, is threatened. We must place first the needs of those among us who are poor and vulnerable, and we must urge others to do the same."
By Steve Perry, Capitol Report, June 25, 2009
The impact of the fiscal hole left in Minnesota’s finances when Gov. Tim Pawlenty exits the stage a year and a half from now is likely to be so big it’ll make this year’s budgetary bloodletting feel like a dress rehearsal.
Around the Legislature, only fiscal staffers and a handful of members have really begun to reckon with it. But a little back-of-napkin arithmetic is good enough to suggest its unwholesome outlines: Minus all the one-time money that eased the way this year, Minnesota’s next budget deficit will be three to four times worse.
In nominal terms, the deficit that the state is facing in the out years of 2012-13 comes to $7.3 billion when estimated inflation is counted, according to a legislative fiscal analysis released last week. That looks plenty formidable, yet also familiar: Hasn’t the state already licked a $6.4 billion deficit? And with less onerous cuts than many feared? To the casual observer, that extra $1 billion in red ink would seem to foretell a budget crisis in 2011 that’s more severe than the one Minnesota confronted this year, but not much different in kind.
Unfortunately, those numbers are misleading. Once you begin putting them in context, any perceived similarity in scale between the crises of 2009 and 2011 falls away to reveal an absolutely unprecedented mess in the making.
For overview purposes, start with the relative size of the two deficits as a share of the general fund dollars the state was projected to collect and spend in the prior biennium. This measure isn’t synonymous with the state’s base budget, due in part to one-time cuts through unallotment in both 2008-09 and 2010-11, but it comes relatively close; call it the revenue base.
Final 2008-09 collections through June 30 of this year are expected to come in at $33.9 billion. The deficit for the 2010-11 biennium that starts on July 1 was $5.9 billion (the widely reported gross deficit figure of $6.4 billion included some 2008-09 shortfalls), or about 17 percent of the prior biennium’s revenues and expenditures.
Final 2010-11 collections are currently projected to be in the neighborhood of $31 billion. The $7.3 billion deficit prediction for 2012-13 is about 24 percent of that.
Just how this compares to expected budget crises in other states during the same period is hard to say, because few states have done projections ranging that far into the future. The most recent update for state budgets from the National Conference of State Legislatures (NCSL), released in April, does not contain comprehensive projections past fiscal year 2010, which begins on July 1 in all but a handful of states.
As a result, one can only compare the scale of Minnesota’s 2012-13 deficit with the gaps experienced elsewhere this year. NCSL fiscal analyst Arturo Perez identifies four states as the most troubled in FY10 budgeting: Nevada, which sported a deficit equal to 32 percent of its general fund; Arizona, 28.8 percent; Florida, 27 percent; and California, 22.3 percent. “These states were the hardest hit,” Perez said, “and housing is the thread that ties them all together. They’re really in a special category because they were so high-flying during the housing boom.”
For comparison’s sake, then, if Minnesota’s projected 24 percent shortfall for 2012-13 had happened this year, it would have placed it third on that list, just ahead of California. (Alaska actually had the second-biggest FY10 gap at 31 percent, but that state is an even more special case due to its heavy reliance on tax revenues from oil.)
But the numbers that matter most in weighing the 2012-13 fiscal crisis are the one-time dollars that were available to solve the 2010-11 budget deficit and won’t be there next time. They come to around $3.8 billion, broken down as follows:
• $1.3 billion (stimulus FMAP/Medicaid).
• $800 million (stimulus fiscal stabilization funds).
• $1.7 billion (schools shift).
Subtract it all from the $5.9 billion gross deficit and you arrive at the figure Minnesota actually had to cut this year through legislative and gubernatorial action: about $2.1 billion. This means that, harking back to the 2008-09 revenue benchmark of $33.9 billion, the actual cuts represent roughly 6 percent of the prior biennium’s collections and expenditures.
You can parse this in a couple of obvious ways:
In inflation-adjusted dollars, the $7.3 billion 2012-13 deficit is equal to 3.5 times the net $2.1 billion hole that the Legislature and the governor had to make up this year for 2010-11.
Or, as a share of the prior biennium’s collections and expenditures, the projected 24 percent 2012-13 shortfall is equal to 4 times the net 2010-11 deficit of 6 percent.
These are difficult numbers to understand. They suggest, among other things, that nothing the Legislature or the governor contemplated this year could have kept the state out of deficit two years from now.
For perspective’s sake, consider where the deficit for 2012-13 would stand even if the DFL-controlled Legislature’s tax increases had passed into law (and actually raised as much as advertised, which is no sure thing in a diminished economy).
If the tax bill that Pawlenty vetoed in May, which contained $1 billion in tax hikes and a $1.7 billion schools cost shift, had been enacted, the projected deficit for 2012-13 would stand at $4.6 billion, or about 2.2 times this year’s net deficit. (That’s because a legislatively enacted shift would not have to be paid back in full in 2012, while most observers outside the governor’s office believe Pawlenty’s “mimic” of a shift will have to be.)
If the Legislature’s highest tax increase proposal — the $2.6 billion in tax increases and tax expenditures in the Senate omnibus tax bill — had been enacted, the projected 2012-13 deficit would be $4.7 billion, or again, about 2.2 times this year’s net deficit. (The Senate’s tax bill didn’t include any shift provisions.)
On the other hand, the projected 2012-13 deficit under these scenarios would be only 63-64 percent as large as the $7.3 billion the state currently faces in those years as a result of the Pawlenty administration’s no-new-taxes brinksmanship.
An incurable optimist might say the good news is that Minnesota’s budgeting session in 2011 is unlikely to bring the same gridlock-inducing arguments over huge tax hikes versus huge spending cuts.
The pessimists would be left to point out that this is because it will take huge tax hikes and huge spending cuts to battle the next deficit into submission.
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