Minn. state budget foes take their corners

Published 11:16 am Tuesday, March 22, 2011

Making good on their promise to balance Minnesota’s budget by reducing spending and to fundamentally change the way some government programs operate, Republican House committee chairs Monday launched their opening salvos in several key areas: education, health and human services, the environment and transportation.

Democrats and some advocacy groups pounced on the proposals, accusing the GOP of cutting too deep, while others praised efforts to bring sustainable fiscal health to a state grappling with spending money it doesn’t have.

That tension likely will be palpable until the session ends in late May.

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Republicans expect Gov. Mark Dayton to veto many of their proposals, but their plan is to move them swiftly through the House, combining them with Senate versions, at which point Dayton will make his intentions clear. Then the real battle of wills will begin.

Among Monday’s proposals:

In K-12 education, Republicans proposed small increases to the basic aid formula but would freeze special-education increases and cut integration revenue for big-city districts.

“It does not appear that this is a serious proposal,” Education Commissioner Brenda Cassellius told members of the House Education Finance committee.

It unfairly targets inner-city schools, she said, creating “clear winners and losers.”

In addition, proposed cuts to the Department of Education “would decimate our agency,” Cassellius said.

Eliminating integration aid for Minneapolis, St. Paul and Duluth and allowing them to replace 30 percent of the money with local property taxes is “a war on first-class cities,” said Rep. Mindy Greiling of Roseville, lead DFLer on the committee. Those cities “also happen to be represented by DFL legislators.”

The integration cuts would cost St. Paul Public Schools nearly $14 million, said school board member Jean O’Connell.

St. Paul is using integration money in various ways to reduce the achievement gap, O’Connell said, and “these cuts, simply put, would pull the rug out from under these efforts.”

In special education, O’Connell said, the district already pays $38 million from its general fund as a “cross subsidy” to make up for uncovered costs.

The House bill also would establish a grading system for schools and districts and an evaluation system for teachers and allow students in low-performing schools to enroll in private schools or other districts.

The Senate’s omnibus education funding bill was heard Monday as well. It also contains some increases to the basic revenue amount and freezes special-education increases.

And it does away with integration revenue as well. In its place would be “literacy incentive aid” to increase the number of third-graders reading at grade level.

The bill includes a salary freeze for school employees, calls for five-year renewable contracts for teachers and extends authorizer contracts for charter schools to June 2012.

In health and human services, state Rep. Jim Abeler unveiled a plan to cut $1.6 billion from predicted spending levels that would both reduce services and reform programs for the 800,000 Minnesotans who rely on state-funded services.

The proposal, parts of which drew praise and criticism from various advocacy groups, is on a speedy track to pass out of committee this week en route to approval by the entire House.

“Welcome to phase one of a yet-to-be-determined number of phases,” said Abeler, an Anoka Republican who chairs the House Health and Human Services Finance Committee.

Democrats responded that it cuts too deep into services for children and the elderly.

The bill, which proposes cuts twice as deep as Dayton’s, will face committee discussion today.

Dayton is holding off commenting on any major legislation until it passes out of a chamber.

“I’m moving the bill toward final resolution May 23,” Abeler said, referring to the final day of the session.

It’s unclear if his proposal truly would save the promised $1.6 billion.

Large portions of it — and $300 million in savings — rely on getting a federal waiver to ease strings attached to Medicaid dollars the state receives. Abeler said such requirements force the state to waste money in order to receive federal funds. “It’s unsustainable,” he said.

Abeler and state Rep. Steve Gottwalt, who chairs the House Health and Human Services Reform Committee, said they believe if Dayton gets behind their plan, they were confident the federal government would sign off on the waiver.

But state Rep. Paul Thissen, House minority leader, seized on that uncertainty. “Half of this budget is phony money,” he said.

The largest savings in the bill reside in funding cuts — some $700 million — to programs serving the elderly and children, but unlike Dayton’s proposal, which sought to lower payment rates to nursing homes and some health care workers, Abeler’s plan would make steep cuts via reforms.

Some of the reforms are being lauded by groups that otherwise are criticizing the plan.

In environmental matters, House Republicans have proposed what’s been depicted as a significant weakening of sulfate standards in wild rice waters.

The environment and natural resources committee bill would change temporarily the existing 10 milligrams per liter maximum, long regarded as the standard needed to protect naturally growing wild rice, to 250 milligrams, the same standard as drinking water. The change would be in effect until a study determines a new standard.

State Rep. John Persell, DFL-Bemidji, said if that language stays, lawmakers will be picking an unnecessary fight with the federal government and some Indian tribes.

The larger bill contains an altered and controversial set of recommendations for how lottery money should be spent.