Sate budget crisis offers chance to fix system

The general public wants a long-term answers to the state’s $5 billion budget shortfall. State leaders say that deficits like this one represent a real opportunity for reform.

But whether negotiators take that opportunity to make structural change or punt the problems to the next set of negotiations will depend on whether the two sides can settle on budget numbers early and offer bargaining olive branches soon. That was the takeaway from a Humphrey Institute forum on Monday that featured two Republican legislative leaders (House Speaker Kurt Sellers and Senate Majority Leader Amy Koch) and two staffers for DFL Governor Mark Dayton (Revenue Commissioner Myron Frans and Management and Budget chief Jim Schowalter).

The speakers at the Humphrey Institute pointed to places where reforms are on the table.

***Sen. Koch said that GOP change in education funding (such as cutting integration aid to metro schools and freezing special education funds) represents a real effort at fundamentally reforming education.

***Republican leaders also said they would reform health care by seeking a federal waiver from Medicaid rules that would allow the state to scrap the MinnesotaCare health program and instead give subsidies to those recipients to buy insurance on the open market.

***Revenue Commissioner Frans suggested a reform as a place where the GOP lawmakers and the governor could agree: Changing tax laws to close loopholes for businesses and make the corporate tax system level.

But the tax proposal gave an indication of just how difficult structural changes might be. Koch, in response to Frans, said Republican legislators would like to simplify the tax laws for businesses, but that it likely won’t happen in this legislative session.

Meanwhile, House Speaker Zellers and Dayton’s budget commissioner, Schowalter, seemed to get closer to agreement on just how much money the Republican budget plan would save. The two sides haven’t trusted each others accounting figures.

Zellers said that he and Schowalter ought to get their consultants in a room and “lock them in until they come out with a number.”

Dayton’s staff said negotiations on the budget, much less on structural reforms, will not happen until the numbers both sides use agree.

Minnesota Public Radio has held a series of online discussions in partnership with the Citizens League that examine the values people want reflected in a new state budget. These online forums followed a series of live discussions on the budget where about 600 citizens talked about state budget priorities; all part of the Common Cents project.

A large theme throughout the talks was an emphasis on reforming services, especially K-12 education. The participants wanted tax reform so that they are more fair… and would accept spending cuts if they were tied to long-term answers.

For a look at the liveblog text on the discussion just click here.

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