The Legislature reached a budget agreement with Gov. Tim Pawlenty late Sunday night and the good news is we erased the state’s $3 billion deficit Monday without any new taxes or surcharges.
An agreement was not reached in time to meet the session’s deadline of midnight Sunday but, with a solution within reach, Pawlenty called the Legislature back for a special session at 12:01 a.m. We met throughout the night, the budget work was done Monday morning and the Legislature adjourned before noon on the date originally scheduled.
The bill will help us avoid a California-style bankruptcy and it reduces state spending. The downside is that there is still a huge long-term budget problem looming and we didn't do enough to address that. The latest budget forecast calls for a shortfall in the $5-8 billion range next year.
The budget framework we just finished is a compromise between the two legislative bodies and the governor. The real hang-up was over health care funding: The majority wanted to put more than 100,000 Minnesotans into Medicaid under a provision of federal legislation called early Medicaid enrollment. A deal was reached to eliminate that provision; with the caveat the next governor may opt to enact the early enrollment.
The final legislation also includes additional funding for rural hospitals.
A $1.9 billion shift in K-12 education money also is in the mix, along with some of the $2.7 million in funding reductions the governor made last year but were recently overturned by the Minnesota Supreme Court. It is good we held nursing homes harmless and did not cut K-12 education.