A difference in priorities has led to a difference in budget-balancing plans between the governor and House DFL leaders.
Approved by the House Ways and Means Committee March 25, and amended slightly two days later, the House DFL plan to reduce the state’s projected $938 million biennial deficit includes the elimination of a $350 million cash flow account, takes $250 million from the state’s $653 million budget reserve and leaves the Health Care Access Fund intact. Gov. Tim Pawlenty’s plan includes $250 million from both the budget reserve and the Health Care Access Fund, along with $341 million in spending reductions.
Rep. Loren Solberg (DFL-Grand Rapids), the committee chair, said the House DFL plan uses some of the resources used by Republicans to solve the $4.5 billion budget deficit in 2003.
“We are taking the cash flow account, and we are leaving enough in the Health Care Access Fund and the budget reserve to be able to manage the cash flow,” he said.
Each House finance division was given a target to meet, but Solberg emphasized it was up to the division to determine how to meet the target. The division targets are to be merged into one large bill by the House Finance Committee.
The targets range from a negative $201.77 million to the House Taxes Committee to a positive $22.87 million for K-12 education. Other targets include a nearly $45 million decrease to higher education and workforce development ($7 million less than Pawlenty), $11 million reduction in public safety ($5.45 million less than Pawlenty) and a $200,000 decrease in transportation ($32.2 million less than Pawlenty).
Committees can meet their targets by revenue changes, spending changes or transfers to or from other funds.
“The governor submitted his budget, and where there’s general agreement on that budget target we have tried to follow that,” Solberg said. “We had several conversations with the Department of Finance on some of those issues. We also have our fiduciary responsibility to pass budget targets that reflect legislative priorities as well.”
Rep. Mary Liz Holberg (R-Lakeville) expressed concern about how the plan addresses the projected deficit in the following biennium.
“We’re going to be in for a heck of a time next year as some of these one-time shifts and funds happen,” added Rep. Jim Abeler (R-Anoka).
The governor’s plan leaves a negative balance for Fiscal Years 2010-11 of about $693 million, but Solberg said House leaders would like to see cuts to state agencies and other programs be long-term cuts. Each division also received a long-term tails target to try to achieve, if possible.
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