Dear neighbor,
Plans for a new two-year state budget came to the forefront this week as Gov. Mark Dayton issued his recommendations for the upcoming biennium.
We in the House will wait for the next complete economic forecast to be issued in February before finalizing our plans, but the governor’s blueprint gives us an idea of where he stands. He also may alter his figures after that next forecast.
The bottom line with the governor’s plan is that it continues to tax and spend without restraint. His plan would raise General Fund spending to $42 billion (a $4 billion increase from this biennium and up substantially from $34 billion when he took office four years ago) and raise All Funds spending to $77 billion (from the current $71 billion). Nearly every dime of the $1 billion surplus that was projected in November would be spent.
For perspective, the governor’s spending increase amounts to $1,244 more for every man, woman and child in Minnesota.
As for taxes, the governor recommends an additional $9 billion over the next decade. A 6.5-percent tax on wholesale gasoline is maybe the most notable. That translates to approximately 16 cents per gallon at today’s prices. I have seen estimates that say this would mean an additional $24.50 more per month for every driver, or about $300 per year per driver and many hundreds of dollars per year for families with multiple drivers.
I was surprised Dayton gave no money to MNSCU in his budget and hope he is working in his role as governor to straighten out differences between the chancellor and faculty unions. On a related note, I am carrying a House bill that ratifies the contracts of MNSCU employees, nurses and law enforcement personnel that work for the state. College professors, state troopers, and others covered by the contract are already being paid under the provisions in the bill, but the contracts have not yet been ratified by the Legislature.
As I noted, the House will come out with a budget plan of its own after the February forecast, likely in mid-March. As chair of the House Ways and Means Committee, I continue meeting with heads of all the House finance committees to outline our objectives and assemble preliminary plans.
I also had breakfast with the governor Wednesday to discuss budget plans. It was an amiable meeting and, among other things, I expressed my interest in providing more education tax credits for students at public and private schools. The expectation is we will continue meeting periodically throughout the session to advance budget discussions.
We had an interesting discussion in Ways and Means this week, pertaining to the state’s Medical Assistance Program. This is a key area when we talk about putting our state on a stable fiscal trajectory because it comprises 25 percent of our state’s projected general fund budget – and even more if you include federal dollars that apply. Without taking the governor’s proposal into account that spends the surplus, our state spending was set to rise $1.9 billion in total, and Medical Assistance is projected to rise $1.4 billion of this amount. That means it is projected to grow more than all other areas of the budget combined.
The Legislative Auditor testified in committee that 17 percent of the people in our state health programs that they sampled have eligibility issues. Many people are in programs for which they don't qualify. Others qualify but are not in the appropriate program – in some cases to their benefit and, in other instances, to their detriment.
This is an expensive, necessary state program that affects many citizens, including nursing home residents. We will be making a concerted effort to make sure we eliminate fraud and payments to those who are not eligible, while also ensuring that citizens who do qualify are in the right program and getting the right benefits.
Thank you to all the citizens who have been providing me with their thoughts on the issues as we make our way through the early stages of the 2015 session. Your continued correspondence is welcome.
Sincerely,
Rep. Jim Knoblach