The governor’s budget

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The governor has unveiled his budget proposals to close the large state deficit. A couple of things stand out.

  • The governor is using money from the Health Care Access Fund, again. This is the tax on health care providers that funds the MinnesotaCare system. It usually runs a surplus. Doctors and providers hate the tax as it is, but they really hate it when the governor takes the money and uses it for things it wasn’t intended to be used for.
  • The governor is reducing eligibility for Medical Assistance to 100% of the federal poverty level. Right now, that’s $10,400 for a single person. $21,200 for a family of four.
  • He’s providing less state reimbursement to hospitals and long-term care providers.
  • Adults without children will no longer be covered under MinnesotaCare. Who are these people? As has been mentioned elsewhere, they’re quite often people with mental illnesses who need meds.

    The repeals on MinnesotaCare are most interesting (at least to me). Said the governor:


    Several enhancements to health care programs have been enacted in the last three years and are simply unaffordable in today’s financial climate. The Governor’s package repeals recent coverage expansions and premium reductions, some of which have yet to be implemented, in Medical Assistance (MA) and MinnesotaCare.

    As indicated before, MinnesotaCare is funded by the Health Care Access Fund (the tax on providers). In recent years, however, the fund’s surplus has been used to offset other areas.

  • The governor proposes merging the Health Care Access Fund with the General Fund. This is why so much budgeting is now being done through Constitutional Amendments. Taxes are raised for a specific purpose, and eventually, the money gets siphoned off for something entirely different, recreating the original need for the tax.
  • The governor replaces the 87 counties handling human services program with 15 regional entities.
  • The governor eliminates state funding of the Combative Sports Commission, and Target Center.
  • He cuts funding to the Arts Board by almost $3.5 million in FY2010 and almost twice that next year. This will be an interesting debate. Arts groups are included in the constitutional amendment voters approved last November that raised the sales tax to provide additional funding for outdoors and cultural programs. That funding was not originally meant to replace current state support.
  • He calls for an additional $90,000 in fees via the Barber/Cosmetology Examiners Board. (I nailed that one! See post earlier today). He also increases fees for dairy and food-handling inspections. Currently, it costs a farmer $45 for an inspection. Now, it will cost $100.
  • He doubles the fee for people who dispense hearing aids from $350 to $700 a year. Also included is a two-year $550 surcharge and a $1,000 exam fee (from $500).
  • He increases fees for hospitals and ambulatory care facilities to participate in the mandated program to report to the state whenever one of 28 serious health incidents occur. He proposes a $100 increase plus a $3 increase per bed.
  • He calls for a $45 increase in the fee to inspect swimming pools, citing the new law on drain covers at swimming pools.
  • He requires local governments to begin paying Well Program fees, including a fee of $50 for each annual monitoring well maintenance permit.
  • He proposes a 20% fee increase for beverage, food, and lodging licenses.
  • He does not reduce or delay payments to ethanol producers, something that state did during the last budget crisis.
  • He eliminates funding for restorative justice programs in the state. Here’s an old MPR story on one such effort.
  • He proposes a 5% reduction in the governor’s office budget and 5% in the Legislature’s operating budget, and 5% for the Supreme Court, and Secretary of State, and several other agencies and offices.
  • He doubles fees for trailer parks and recreational camping areas.
  • He proposes a new $70 fee for background checks for adoptions.
  • He proposes delaying services to children with severe mental health issues for a year.

    There are about a half-dozen MPR reporters working on the story. You can examine some of the budget documents here.

    • MR

      I’m most interested in this proposal:

      The governor replaces the 87 counties handling human services program with 15 regional entities.

      I don’t think that this is inherently a bad idea, but it doesn’t seem much like an immediate cost-saver. It seems like a proposal that needs to be carefully planned and thought-out over a significant period of time. It doesn’t seem like something that should be thrown together in a few months to save a few bucks.

      I may be overreacting, but I also haven’t seen specifics of what services he’s proposing to merge, and that just makes me wonder.

    • c

      //It doesn’t seem like something that should be thrown together in a few months to save a few bucks.//

      this is to make up for the gap caused by bailing out the banks.

      the real gap lies between pawlenty’s ears

    • Carolynn

      Once again, single people take a hit. I sure hope my insurance doesn’t drop me, which is a real possibility since I cost them some money last year.

    • Paul

      Hmmmmm, never seen a stuttering blog before. Anyways, remember these days well my fellow citizens; these are the days we killed people in order to balance the budget. When you cut these services, people die. Someone decides to buy groceries instead of medication that week, some battered woman can’t get out because shelter money and outreach has been cut, some old person goes out to shovel the walk themselves instead hiring the kid down the block, and of course there’s health care, whenever you make health care less accessible in any way someone dies. My parents don’t live in poverty, but they are on a fixed income. You cut aid to local governments, the city raises property taxes to compensate, we always end up paying more for less and what do old people like my parents do? They start counting pennies, they buy the $9.00 toaster at Big Lots instead of the $19.00 toaster at Target. Then that toaster bursts into flames as cheap crap toasters frequently do, and two old people end up fighting a fire in their kitchen. Thankfully in this case they won the battle without undue damage but another 30 seconds and they’d a been on the news. This is how we kill people when we cut services push financial responsibility down to the local levels. We’ll get through this, but people will die so remember these days because this is what we’ve been doing for about six years now, and it’s about to go into hyper drive.

    • Bob Collins

      //Hmmmmm, never seen a stuttering blog before

      ?

    • Joanna

      Aren’t fee just like taxes Mr. Governor? Except for the fact that the fees fall disproportionately to the poor and sick. I think if everything is going to be on the table, than everything, including higher taxes, should be on the table. (Please note this is only responding to the blog, I have yet to look at the actual proposed budget).

    • michele

      I’m struggling to understand the logic behind using the Health Care Access Fund for needs other than health care.

      Given that health care costs are growing (due to increased need and greater administrative costs) wouldn’t it make sense to keep using the HCAF money for health care or cut back the 2% tax on all medical procedures that we all pay?

      This borrowing from Peter to pay Paul is getting tired. More and more it seems like a sad little street side shell game that’s just a big con. Why should corporate taxes rates be cut in half while we and the health care community are punished?

    • Bob Collins

      The practice is part of the “gimmicks” (as some people prefer to call it). It was first started by Kevin Goodno, when he was head of human services for Pawlenty and the surplus was called to his attention at the time by people trying to preserve MinnesotaCare. Whoops. The administration grabbed the surplus, and forced people off MinnesotaCare, saying in many case “they can get GA.” Now, obviously, they’re trying to get people off GA, too.

      BTW, I believe — and don’t quote me because it was a court case from about 16 years ago — health care providers are prohibited from passing the tax on to patients.

      Someone who knows more can jump in here.

    • http://www.annmillikan.com Ann Millikan

      It should be ILLEGAL for Pawlenty to steal money from the Health Care Access Fund, which has a surplus, for other purposes. To turn around and cut 84,000 people, including myself and my partner, from MNCare is criminal. As someone said above, people will die. What if you need regular medications, cancer followup appointments, how are you supposed to pay for it without insurance Pawlenty? Especially when you are cutting arts funding also…you are hitting us twice, when we’ve already been suffering the economic downturn the past couple years. Fair taxation of corporations and the wealthy, not endangering people’s lives Pawlenty! You have no right to use that money for any purpose other then what it was raised for: Healthcare. The law needs to be changed to protect the Healthcare Access Fund from theft.

    • Paul

      //Hmmmmm, never seen a stuttering blog before

      ?

      For while there the “air between his ears” post repeated like five times, but it’s fixed now, unlike our governor’s grasp of economics.

    • Bob Collins

      Ah, of course, that explains it. Yes, a few folks like to press “post” many times thinking it’ll get it posted faster. (g)

    • Bonnie

      How would you like to be a local dentist or chiropractor who is paying 1.5% of his/her GROSS income before ANY expenses of the clinic, into a “fund” that is now going to be used to “balance” the state budget. A relatively small sized clinic is easily paying $ 7-10,000 every year!!! I can’t believe they put up with it.

    • michele

      @ bonnie

      If the governor has his way the 1.5% will go to reduce corporate taxes. Now that’s gonna be a hard pill to swallow.

    • Doug

      I’d rather have a few more bucks come out of my pay check every other week than all of the fees…everything from parking meters to filing fees to you name it!

      …but then I got to the bottom of the post and saw, “He proposes delaying services to children with severe mental health issues for a year.” Being a teacher, I see kids every day that badly need these services. Adults who can make choices are one thing, but helpless kids are another. Come on Mr. Potter!

    • Peter Millin

      The governors budget is not going far enough. Just today Target had to lay off 10% of it’s workforce. Yesterday over 60000 people have lost their job in the private sector.

      My wages were frozen and my bonus was eliminated this year

      Where are the government job cuts? Where is the freeze of government wages?

      I can’t comprehend why most people in the private sector have to do with less and government workers can’t?

      Especially since my earnings pay for their wages, this is an outrage.

    • http://healthygopher.blogspot.com Elizabeth T

      I have yet to see any money source to the gov’t actually be held for that purpose in perpetuity.

      “raise money for the arts” goes to road construction. “raise money for Health Care” goes to balancing the budget. “money for road construction” goes to something else.

      There are no sacred cows, when it comes to government spending monies already raised. Unless perhaps it’s the paychecks for the Legislature/Governor.

      Shifting money around isn’t inherently a bad thing. The Bad Thing is the fact it constantly happens – an indication of poor fiscal planning and management.

      Re: posting about eliminating/reducing care, especially mental health care … one can tell how “real” society thinks the problem is by where they cut the funding. No matter how big that billboard is (next to the Metrodome?) with suicide prevention awareness due to depression … the are an awful lot of people who don’t think depression (or some other mental “illnesses”) are actually illnesses. If it’s not a “real” medical problem – on to the chopping block! Or, if the target population isn’t really visible to mainstream Minnesotans, on to the chopping block it goes.

    • michele

      @ Peter

      Your comparing your specific situation (pay cut and loss of bonus) with a large generalized pool of state workers.

      You don’t tell us what you do. It would be helpful to know if you are a stock broker for Merrill Lynch, or a banker who accepted bailout money, or a health care worker who puts in long hours to help treat people with cancer, or whatever.

      Likewise we need to look at specific state services and consider the value they provide society when making the decision to cut someones pay.

      I don’t think it’s so easy as just getting out a big ax and start chopping away.

    • michele

      Hey Peter,

      I just re-read your post and realize you didn’t even have a pay cut just a pay freeze and you didn’t get your bonus; but your suggesting job layoffs and pay cuts for state workers. …

      I’m starting to get a distinct impression you do work in financial services..

    • http://www.secretsofthecity.com/magazine/blogs/defenestrator Rich Goldsmith

      What I’d especially be interested in knowing, and have yet to get a satisfactory answer on, is how much of this proposal has been reviewed with an eye to the future. Despite repeated queries to the governor’s office, I can’t even get an answer regarding how much interest the state would pay on the loan the governor is proposing we get on the tobacco monies. Without even being offered that rudimentary figure I can’t even begin to have confidence that these proposals have been thoroughly vetted for how much they’ll cost the state in the grand scheme of things.

    • Chris

      Pawlenty’s budget has an eye to the future all right. Namely 2012, when he can run for president on a platform of “I balanced my state’s budget while cutting taxes and funding education.”

      Oh, wait, you meant the future of the state and its people! Ha ha, silly me.

    • Al L.

      Taking money from the Health Care Acess Fund is not what the money is intended to be used for. This is comparable to the federal government stealing from Social Security. Taking health care from low wage earners will only increase the cost of health insurance for those who still have a job. Now is not the time to cut corporate taxes at the expense of those who are less fortunate. The Goveror should begin by giving up his health care coverage first. He seems to have a double standard.

    • Al

      I wonder how much money the many fee increases will actually raise. It seems like a way to cause disproportionate hurt and not raise meaningful money ($5 billion dollar hole).

      It could a matter of how I like funding to work. I would rather see all of what I owe up front and know what I am going to have to pay. We send our kids to a parochial school and I hate the $10 here and $25 there after paying tuition. Give me the entire bill up front. I can plan for that.

    • Carolynn

      Hey here’s an idea: how about Guv and all high level government employees have no more health care insurance.

    • Paul

      Peter M asks:

      “Where are the government job cuts? Where is the freeze of government wages?

      I can’t comprehend why most people in the private sector have to do with less and government workers can’t?

      Especially since my earnings pay for their wages, this is an outrage.”

      Hundreds of state workers have been laid off over the last six years, wages have been cut in the last two contract cycles, and benefits have been reduced, premiums raised etc. Many government workers are already getting paid 20%-30% less than they would be for the same jobs in the private sector. By the way, government NEVER get a bonus of ANY kind. There’s been a hiring freeze for almost a year now. Furthermore as practical matter of fact, government workers do more with less resources than private sector workers because they’re always on a fixed budget. The myth of private sector efficiency is one casualty of the recession now that we see corporations trying to cope with decreased or flat revenue streams.

      As to your paying government workers wages, a little primer in basic economics is in order. No matter what you do, we’re all paying your salary. What do you think, your company prints up your salary money in the basement? I’m paying your salary when I buy your product or services, or eat at your restaurant, directly or indirectly all of our money comes out of everyone elses “earnings”. The difference between government and the private sector is that for every dollar you give the government you get six to eight back in economic benefits. When was the last time you got a 700% return in the private sector?

    • geri

      I haven’t seen this discussed yet – I believe the Governor’s cut to Medical Assistance eligibility may make MN ineligible to receive increased FMAP (medicaid) money in the stimulus package. The stimulus bill says that to receive increased FMAP, a state must not have Medicaid eligibility levels that are more restrictive that were in effect on July 1, 2008.

      I’m waiting for someone smarter than me to confirm or disprove this hunch.

    • Greg

      We all have to realize, it makes little difference whether its Fee’s or Taxes their all the same. Face it people all want “their” programs, ok well then how do we pay for them? imagine that we have $100 for the whole state budget no more no less. The only choice we have is to divide up the $100 in the best way possible. We cannot either increase taxes and spend a bunch more nor print a bunch more money in the basement. Face it we either can raise taxes or cut spending neither which are fun but neccessary in tough conditions.

    • Jennifer B

      So, if MinnesotaCare would no longer be available for adults without children, would that include those with developmental disabilities??

    • postergirlforyellowcanaries

      //Ah, of course, that explains it. Yes, a few folks like to press “post” many times thinking it’ll get it posted faster. (g)//

      Bob-

      If one does not hit the post buttons many times one will get a message that their post is being previewed by ? ‘Bob Collins’ News Lackies?’ before they DECIDE to post it which case the comments never get posted.

      One will learn that if they switch to automatic they get a spray of posts but at least one will make it on the page and sometimes well more than one. Kinda like those Tommy Guns.

    • c

      who do we owe the missing money to?

      who is the recipient of the deficit if i may be so stupid to ask?

      i am confused as to where money magically comes from to pay off bankers-aig?

      can we use magic money to run our state funded programs or is it only for the rich folks with all the answers tht live up on top of the hill?

    • Bob Collins

      //If one does not hit the post buttons many times one will get a message that their post is being previewed by ? ‘Bob Collins’ News Lackies?’ before they DECIDE to post it which case the comments never get posted.

      I’m not aware that’s a problem but if it is the comment will get posted if it’s on topic. I check the various queues often.

      The only thing that machine-gunning the POST button does it make more work for me.

    • c

      sorry Bob-

      I didn’t want to make more work for you. Several times I have posted and it does not get posted.

      for example yesterday I commented on the Target article. You brought up Walmart in the topic. I made a post about shopping at Walmart is like taking a bribe to do harm against another human being

      and

      I also posted a link to an article about Walmarts inhumane business practices here in the US and in other countries. How was that comment not on topic?

    • bigalmn

      The governor’s stealing from the Health Care access fund will just yield more amendments to the constitution for specific funding which yields more problems.

      He really needs to look at the administrative costs of government and develop methods to trim those substantially.

      One example he is doing is developing 15 admin areas for a program. Lets do more of that rather than have admins in every county.

      The extension service had to do that a few years ago when their funding got cut and it seems to be working fine at less cost.

    • tiredboomer

      When will politicians like our Governor realize that not raising taxes and trying to starve government doesn’t work!

      Twenty eight years ago Ronald Reagan got elected president on the strength of his trickle-down economic theory. The two things that are supposed to make trickle-down work are “cut taxes to wealthy job creators” and “deregulate so the money can be put to good use”.

      Remember the primary elections between Reagan and George H. W. Bush? Bush called trickle-down economics “voodoo economics”. Eight years later, Bush coined the phrase “read my lips, no new taxes”. Just goes to show you, some politicians will do anything to get elected.

      So for 28 years, with only a slowing of the momentum during the Clinton years, we’ve been giving big corporations big tax breaks and practicing a Republican policy of “spend and borrow”.

      As it turns out H.W. Bush was right when he called it voodoo. We’ve hit a wall. We deregulated the financial industry into bankruptcy. And trickle-down has worked so well, the lowest paid are making almost exactly what they were making 28 years ago (in real dollars, not inflation adjusted dollars), while the highest paid have doubled their income (inflation adjusted dollars). Yet Republicans keep insisting that “all we need to do is cut taxes to jump start the economy.”

      So our Governor decides to solve our state problems by withholding essential services from those least likely to hurt his political ambitions and using accountants to shift money around like he was running a modified Ponzi scheme.

      Governing is messy business. Nothing will change until Democrats and Republicans are willing to sit down TOGETHER and slog through the budget with a real eye turned toward evaluating short-term costs vs. long term benefit (not just considering dollars, but also human and environmental costs/benefits). And yes, everything needs to be on the table, including tax increases.