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Legislative News and Views - Rep. Sondra Erickson (R)

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Budget agreement ends shutdown

Tuesday, July 19, 2011
Dear Neighbors, Governor Dayton called a special session for today that will allow us to pass the budget bills that will end the shutdown. Here is an overview of the budget agreement and the main points of the budget bills. The budget agreement does not raise taxes. Overall, we’ll spend about $34.3 billion, including several reductions to base spending this biennium as well as next. The highlight of this budget will be the reforms. These are new, permanent reforms to the way government works. I believe that they will not just balance today’s budget, but permanently bend the curve of government spending, making future deficits smaller or even producing surpluses. In health care alone, the reforms are expected to save $10 billion over the next decade. Education I was involved with the negotiations on this bill, and I’m pleased that we were able to get several reforms we sought: teacher evaluation, principal evaluation, repealing mandates and the end to integration funding in 2013. We made strides in bringing equity to funding, creating revenue for small schools with less than 1,000 students as well as the integration sunset. Health and Human Services This is a landmark bill that brings major reforms to state health care programs. Originally, this spending was going up nearly 40 percent. Thanks to our bill worked out with Governor Dayton, that increase is down to 11 percent. We also cut future spending growth in half, which will relieve major pressures on the rest of the budget. But the story of this bill goes beyond spending. It repeals the “sick tax” placed on visits to the doctor, something we’ve been fighting for nearly two decades. It reforms EBT (the cash card used by welfare recipients) and welfare eligibility, gives people on state-run programs the chance to buy private healthcare coverage, and increases funding for small rural nursing homes and pharmacies. Environment/Energy Spending on environment and energy was reduced 19 percent over four years from the previous budget. Reforms in this area include streamlining the state’s water management programs, which are currently done by five separate agencies. We’re also getting the DNR out of competition with private tree nurseries. This is an area where government doesn’t need to be and it’s good we were able to make this reform. Higher Education Higher education spending is reduced 13 percent, with a number of reforms. The U of M and MnSCU must meet performance benchmarks to get all of their funding. Those benchmarks include more students taking online courses, increasing completion rates and increasing 4-year and 6-year graduation rates. It also places tuition caps on 2-year schools, which have higher-than-average tuition compared to other states. It also increases funding for the Work Study Program to help students work their way through school and does not cut Postsecondary Child Care grants, which help working parents get their degree. Public Safety Public safety spending is reduced 2.7 percent. For the first time in 15 years, the bill raises co-pays for prison inmate health care visits. It also will save counties money by allowing them to reimburse medical costs at a higher rate. We also did a very positive change to treat juveniles sold into prostitution as victims, not criminals. State Government The cut includes 5-percent to all constitutional offices and major agencies, 5-percent for public TV and 15-percent for public radio. Reforms include consolidating technology (where government is way behind the private sector), auditing state employee health insurance for eligibility checks, reducing the number of job classifications, and giving employees who come up with savings ideas a bonus to encourage them to think outside the box. We are also creating a system that reviews state employees on a pay-for-performance basis. These are great reforms that we’ve fought for for decades. Taxes Most importantly, no tax increases. The bill includes an increase in the Property Tax Refund program, estate tax reforms to help farms remain in families and LGA reductions. For counties, the bill gives them a bit of mandate relief, letting them fund Maintenance of Efforts at 90 percent of current levels. Transportation The transportation bill reduces General Fund spending by 25 percent, but most transportation funding takes place outside the General Fund. Road and bridge spending is actually going up more than $200 million. The big reform here is that light rail advocates must now disclose the total cost to build and operate new transit lines. Previously they only had to consider the cost to build them. Operating costs, which will run in the tens of millions of dollars, fall to all taxpayers. This will help us fully see those costs before deciding whether or not to give new light rail the okay. Erickson can be reached by phone at (651) 296-6746. She can also be contacted via e-mail at, or via U.S. Mail at 509 State Office Building, St. Paul, MN 55155. --30—
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