Cutting budgets is never easy, but Rep. Bob Gunther (R-Fairmont) was given a particularly challenging task this year. As a committee chairman, he was instructed to cut state spending by 58.3 percent in an area of the budget that both parties agree is critical: jobs.
He fulfilled his mission, but not without a few bumps along the way.
HF1049, the omnibus jobs and economic development finance bill, would fund workforce, business development and housing-related programs in the state. It includes plans to cut General Fund spending for a number of agencies, including:
• 10.8 percent from the Housing Finance Agency;
• 7 percent from the Department of Labor and Industry, and
• 5.8 percent from the Department of Employment and Economic Development.
The bill also funds a number of smaller boards and agencies that receive minimal funding changes.
To meet the goal of a 58.3 percent reduction without making deeper cuts, the bill would use $76.3 million in one-time revenues. By doing so, it would whittle the 58.3 percent cut down to just 6.2 percent of actual reduced General Fund spending.
The bill would reprioritize funding to focus on programs that spur job growth and those that serve mentally and physically disabled Minnesotans. Gunther said the bill makes the best of a difficult situation.
“This has not always necessarily been a labor of love, but we did this to attain our target, which we did,” Gunther said.
Not everyone loses funding in the bill. One example is the Minnesota Investment Fund, which provides grants to help businesses retain and hire new workers. Kevin McHenry, a government relations specialist for Metro Cities, thanked Gunther for including a $1 million boost to the fund.
“I realize it’s a difficult job putting a budget like this together,” he said.
Those whose programs were cut were less thankful.
Deb Bahr-Helgen, director of the Minneapolis Employment and Training Program, said a proposed
$1.17 million cut to the program will mean 150 fewer jobs for disadvantaged youth.
“The summer jobs programs provide meaningful work experience, and the chance for a young person to learn the value of earning a paycheck,” she said.
Not everyone is happy with the cuts, but at a March 22 meeting of the House Jobs and Economic Development Finance Committee, it was the $76.3 million in one-time money that drew the ire of many DFL members.
The largest of the transfers — $60 million — would come out of a special account called the Douglas J. Johnson Economic Protection Trust Fund. Money for the fund comes from Iron Range mining companies that pay a production tax in lieu of property taxes.
Between the $60 million transfer and an $892,000 cut to the Iron Range Resources and Rehabilitation Board, Commissioner Tony Sertich said the Iron Range is being asked to plug 70 percent of the bill’s apparent budget gap.
“What you’re asking is for 70 percent of the cut in the jobs area to come from about 3 percent of the state’s population … I think that is quite disproportionate,” Sertich said.
DFLers argued it would be unfair to take money meant for one specific region of the state and use it to fix a statewide problem. During a sometimes heated exchange, they grilled Gunther on the provision.
“I think that you’re stealing $60 million of our local money,” said Rep. Carly Melin (DFL-Hibbing).
Gunther said he regretted the inclusion of the provision, but that he had few other options given the size of the deficit.
“I didn’t relish to see that that was on my plate in order to balance this committee’s budget. I still am looking for ways that we can balance the budget of this committee without touching any funds from the range,” Gunther said.
Other members supported the provision as a necessary measure.
“You say, ‘Hey, this is our money. You’re taking our money.’ I’m saying we’ve got to balance this budget,” said Rep. Ernie Leidiger (R-Mayer).
The committee approved the bill 12-9 and sent it to the House Ways and Means Committee. Sen. Geoff Michel (R-Edina) sponsors the companion, SF887, which awaits action by the full Senate.
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