ST. PAUL – As Minnesota lawmakers begin taking steps towards solving our state’s projected $6.393 billion deficit, State Representative Greg Davids (R-Preston) said he is concerned about the $1.8 billion in federal funds that will be utilized to help reduce our deficit.
“Common sense says that if someone is going to give you money to eliminate your debts, you use it,” Davids says. “But the problem with this federal funding is that it will arrive with strings attached that will create more baseline state spending that’s unsustainable in the future.”
Davids said the federal funding will preserve and expand programs like Medical Assistance by more than $1.3 billion over the next two years - and spending in this area is already out of control. With the strings attached to the federal match, that spending would increase $862 million for FY 2010, and another $497 million for FY 2011.
For Fiscal Year 2012, expected Medical Assistance spending (not including inflation) would total $4.2 billion. Yet those federal funds that expanded the size and scope of this program would be gone for good, and Minnesota would be left to backfill the financial hole left behind.
Further compounding the problem: In Fiscal Years 2012-13, revenues are expected to be $5.133 billion less than projected expenditures before adjusting for inflation.
“There is no question we must take care of our most vulnerable citizens during this time of economic crisis,” Davids said. “But we are basically allowing the federal government to dictate how Minnesota should solve this problem.”
“The federal government has enough problems of its own; it really shouldn’t be telling Minnesota lawmakers that we need to continue funding programs that other states don’t have,” Davids concluded.