April 5 hearing will look at impact of federal cuts on Minnesota

The Legislative Commission on Planning and Fiscal Policy will hold a hearing next Friday on the impact of the federal budget cuts on the state of Minnesota.

Rep. Lyndon Carlson, DFL-Crystal, says they’re holding the hearings because legislators are concerned that the automatic, across the board spending cuts could have an impact on the state’s budget. He says the hearing will help lawmakers determine the scope of the cuts.

“If there is a reduction in federal funds that will obviously have an impact on the state budget,” Carlson said.

Minnesota is already facing a $627 million budget deficit over the next two years. Carlson says he wants to know whether the federal cuts will cause the state any more budget heartburn.

Those most likely to be hit hardest include the health department, employment assistance, higher education and local governments.

“The sequestration phases in over the next few months so how rapidly some of those reductions may hit state agencies or local school districts and higher education would be one of the key questions,” Carlson said.

The cuts were enacted after President Obama and Republicans in Congress failed to reach a broader deal on reducing the federal deficit.

MPR’s Brett Neely has been tracking some of the impacts of the cuts. In early March, he wrote that some federal employees were already planning for reduced pay or furloughs. Neely also detailed where some of the cuts could occur in Minnesota.

State finance officials released a document last year that tried to predict some of the cuts to state agencies but they’re still unsure of the overall impact. Here’s the document Minnesota Management and Budget released in October.

Policy Analysis Conference 10-10-12