A tale of two visions: State government - MNBudgetBites

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A tale of two visions: State government Posted: 10 Jun 2011 06:00 AM PDT The state government area of the budget funds a variety of agencies, offices and boards responsible for the basic operations of state government, such as offices established by the state constitution, the Department of Revenue, Minnesota Management and Budget (MMB), and the departments of Military and Veterans Affairs. Many policy and budget decisions that affect all state agencies are also included this budget – such as proposals that impact state employees and the way state government operates. Overall, the Governor increases funding for state government operations by $3 million and raises $44 million in revenues in FY 2012-13. His budget proposal includes reductions for some state agencies, but also invests in initiatives to improve government efficiency and performance. The legislature takes a very different approach, reducing funding for state government operations by $145 million and raising $168 million in revenue in FY 2012-13. To achieve this level of spending cuts, the legislature makes deeper cuts to state agencies than the Governor proposes and includes several controversial initiatives to reduce the size of state government. There are several areas where Governor Dayton and the legislature share a similar goal, although their proposals have important differences: Both the Governor and the legislature plan to raise additional revenues by increasing tax compliance. Governor Dayton would raise $32 million in net revenue for the state. The legislature goes much further, anticipating that the state would raise $133 million in revenue in FY 2012-13 by employing analytic and intelligence tools to identify businesses and individuals that are not paying taxes they owe. The Department of Revenue has been unable to model this unprecedented tax compliance proposal and could not confirm the projected increase in revenue, although the Governor stated in his veto letter that his administration is pursuing the idea. Both the Governor and the legislature cut the Department of Revenue’s operating budget by five percent in FY 2012-13. The department would also likely be impacted by $95 million in overall state agency staff and funding cuts we’ll discuss in a moment. Both proposals recommend reductions to some cultural opportunities that add to the quality of life in Minnesota. The Governor recommends a five percent reduction to the MinnesotaState Arts Board, the legislature makes a 15 percent reduction. TheMinnesota Historical Society is cut by four percent in the Governor’s budget and by 10 percent by the legislature. And the Science Museum of Minnesota is cut by three percent in the Governor’s budget and by 15 percent by the legislature. Although the Governor and legislature both cut funding for the state legislature by five percent in FY 2012-13, the legislature cuts theGovernor’s office by 10 percent. The Governor cuts funding for his own office by five percent. Minnesota Management and Budget (MMB) faces a five percent reduction from base funding in FY 2012-13 in the Governor’s budget. The legislature cuts MMB’s budget by 10 percent while requiring the agency to implement new initiatives like an agency sunset commission and a zero-based budgeting process. There is one area of complete agreement – educational programs for the military would get additional funding in both budget proposals. They propose a $3 million increase for tuition reimbursement in theMilitary Affairs Department, enabling the continuation of 100 percent tuition reimbursement for members of the National Guard, and nearly $2 million in additional funding for the Higher Education Veterans Programs, helping veterans access their educational benefits and make the difficult transition from the military to college. One proposal unique to Governor Dayton’s budget is funding for examining state government performance, including increased funding for the Small Agency Resource Team, new funding for a Results Management Initiative, and new funding to evaluate whether some small agencies, boards and commissions can be merged or abolished. Proposals unique to the legislature’s budget include: Directing Minnesota Management and Budget to cut $95 million from state agencies. To reach this level of savings, the legislature requires that the state workforce be reduced by 15 percent by 2015, eliminates a number of deputy commissioner and assistant commissioner positions, proposes significant changes to health care for state employees, freezes state employee salaries for two years, and recommends various other changes in the way state government operates. The legislature largely shields Minnesota State Colleges and Universities, the Department of Veterans Affairs and the Department of Military Affairs from these reductions. Entering into an agreement with the federal government to pursuedebt collections, raising $37 million in FY 2012-13. The official fiscal note projects only $4 million in revenue. Cutting funding for the state’s Councils of Color, which advise policymakers on the issues facing their particular community. The legislature cuts funding by 13 percent to the Indian Affairs Council and 20 percent to the Council on Black Minnesotans, Chicano Latino Affairs Council and Council on Asian-Pacific Minnesotans. Eliminating state funding for the Twin Cities Regional Cable Channel and cutting funding for Minnesota Public Radio by 68 percent, only leaving money to cover an Emergency Alert and AMBER Alert system upgrade. Funding for public television is reduced by 10 percent in FY 2012-13. The state government area of the budget isn’t one that captures all the headlines - we aren’t talking about health care for children or affordable housing for the homeless. However, what we are talking about is the backbone of how we operate state government. The deep cuts proposed by the legislature – such as the 15 percent reduction in the state workforce – would signficantly hamper the ability of agencies to carry out their duties for the citizens of Minnesota. As former Speaker Steve Sviggum recently acknowledged at a public forum, state agencies can no longer keep doing more with less. If policymakers pursue deep cuts to state government, they also need to decide what we will stop doing. -Christina Wessel & Scott Russell Minnesota BudgetBites Filed under: Budget Proposals