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State Representative Paul Anderson
100 Rev. Dr. Martin Luther King Jr. Blvd.
651-296-4317
For more information contact: House GOP Communications 651-296-5520
NEWS COLUMN
GOV. MAKES BUDGET DECISIONS
By State Rep. Paul Anderson
Although we all knew the announcement was coming, when Gov. Pawlenty made his unallotment choices public last Tuesday, the numbers were sobering. They reminded us once again that problems still remain with the state budget and, in a bigger sense, the national and world economy.
Needing to chop $2.7 billion from the upcoming two-year budget, the Governor made substantial cuts in LGA payments to local units of government, along with reductions to the Health and Human Services Department and higher education. The largest cut isn’t really a cut at all, but a postponement of payment for K-12 education in Minnesota.
Nearly $1.8 billion in state aid to schools will be held back via an accounting method known as “shifting.” Although some might more aptly call it “smoke and mirrors,” the state can take that $1.8 billion off the next biennium’s expenses by delaying payments to public schools. The key words here are “delayed payment,” which means the schools will eventually get their money, either next year or next biennium.
In normal times, schools get their state aid via a 90-10 split, with 90 percent of it coming in the current year and the remaining 10 percent after the year has ended and actual enrollment figures are known. Now, with unallotment, that shift will become closer to a 73-27 shift.
What that means to schools is they will need to borrow money to cover the shortfall in state aid. These short-term loans will cause the schools’ interest expense to rise. Although schools obviously don’t like this shifting, officials are quick to point out that a shift is better than an outright cut in spending.
The $300 million in LGA cuts are serious, especially when looking at next year. One-third of the cuts will take place this year, with the other two-thirds slated for 2010. Our cities and counties don’t have much fat left to trim, so any cuts they are forced to make will be felt.
Counties with populations under 5,000 and towns with less than 1,000 residents are once again exempt from this latest round of cuts.
The Legislature needs to re-examine the entire concept of LGA. Our rural areas need this form of state aid because we have lower property values than the metro area. Yet, the way funds are currently allocated, the city of Minneapolis gets, by far, the largest LGA payment.
One positive note about this round of unallotment is that inpatient hospital services and nursing homes were spared further cuts.
When all is said and done, the upcoming budget represents a first in Minnesota history. For the first time ever, the upcoming state budget is smaller than the previous one. It represents 96 percent of the last budget.
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Rep. Anderson encourages constituents to contact his new office with input regarding any state legislative issue. He can be reached on the web at www.house.mn/13A and via email at rep.paul.anderson@house.mn. To contact Anderson by phone, call (651) 296-4317. Mail can be sent to Rep. Paul Anderson, 239 State Office Building, 100 Rev. Dr. Martin Luther King Jr. Blvd., St. Paul, Minnesota 55155.
News Items
- ANDERSON TAKES HOUSE OATH - (Posted: Jan 8 2013 12:00AM)
- Legislative begins this week - (Posted: Jan 11 2013 3:36PM)
- Current surplus allows K-12 repayment - (Posted: Dec 10 2012 12:00AM)
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