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Here's what the GOP's state budget-balancing plan could look like

Even some Republican legislators expressed angst over some of the cuts Dayton made in his initial budget.
MinnPost photo by Terry Gydesen
Even some Republican legislators expressed angst over some of the cuts Dayton made in his initial budget.

This is the week that Republican legislators are expected to match their deeds with their campaign rhetoric.

Both Senate and House leaders are expected to hand spending "targets" to the legislative committees. Add up those targets and you'll get a pretty good picture of how the Republican-controlled Legislature plans to hold Minnesota spending to $33 billion in the 2012-13 biennium and put the state's $5 billion deficit into balance without raising taxes.


That $33 billion is about $4 billion less than spending proposed by Gov. Mark Dayton, who would raise taxes on Minnesota's top wage earners.

"It's a monumental job, nothing fun about it," said Republican Sen. Warren Limmer of the GOP vision. "I don't think even the fiercest fiscal conservative would tell you that this is easy."

Yet, throughout their campaigns, Republicans have insisted that it's a job that must be done and that they will do it.

But how?

Conversations with numerous legislators and others involved in the budgeting process lead to some sweeping generalizations. They declined to be quoted but agreed to share their views of what's ahead on a background basis only.

Can it be done?
DFLers simply don't believe it can be done. They also believe that tensions are rising within the Republican caucus over how painstakingly hard the process will be.

Republicans, on the other hand, don't deny their task is hard. But they seem to rally around the idea that state government is constitutionally required to cover three main areas: public safety (which includes the judiciary and prisons), K-12 education and transportation.

Everything else — much of what is done by Human Services and such things as Local Government Aid — is icing on the budget cake.

State Sen. Warren Limmer
State Sen. Warren Limmer

Limmer, who chairs the Judiciary & Public Safety Budget & Policy Committee, points out just how much our view of government has changed in the last few decades.

In 1974, he said, there were four volumes of Minnesota statutes that covered the first 120 years of statehood.

Since then, nine new volumes of statutes have been added ,and "the size of the type has become smaller!"

Most of those statutes include some sort of state spending.

"That was fine when times were good and the economy was roaring," Limmer said. "But that's not where we are now."

So scaling back government is the guiding — and uniting — Republican principle. But again, that's much easier said than done.

Here, according to insiders, is what's likely to happen under the Republican budgeting process:

The budgeting process
Start with this: After consultation with caucus leaders and committee chairs, the targets have been established by Rep. Mary Liz Holberg, chair of the House Ways and Means Committee, and Sen. Claire Robling, chair of the Senate's Finance Committee.

Once those targets have been announced, it is considered extremely bad form by other committee chairs to whine about their targets.

The respective committees will hold hearings on those targets, hearings that will be filled with angst over proposed cuts. Adjustments in where money is spent will be made by the various committees, but always within the targeted goal.

Although the Republicans have vowed they want to create stability in future budgets by doing away with "gimmicks" that have led to budget-balancing in the past, the first big step Republicans will make toward balance is a traditional gimmick.

Like the governor, they will continue the "shift" of $1.4 billion owed to K-12 education. That money was shifted into the future last year, sort of a giant IOU from the state to school districts. By continuing the shift, the deficit falls to $3.6 billion. (It's possible that even more money could be added to the shift, though it would be hard to sell that as anything but a gimmick.)

K-12 education accounts for 38 percent of the budget, meaning more will have to come from that pot, even though many Republicans have promised to hold education "harmless" in the budgeting process.

Holding education 'harmless'
But "harmless" is one of those terms that means very different things to different people, and given the complexity of the K-12 budget of about $14 billion, it's not difficult to use some smoke and mirrors and still claim that funding for kids has been "held harmless."

The big puff of smoke Republicans will use to make cuts in the education budget will center on the last budget, which included $500 million in federal stimulus money. That money is gone, but Republicans almost certainly will say that the state, in these hard times, can't be expected to replace it.

So likely, that will end up as the baseline targeted cut, bringing the overall deficit to around $3.1 billion.

Republicans almost certainly will use the word "equity" and the mantra that "a kid is a kid is a kid" to explain how lopping $500 million from education isn't really a cut to classroom activities.

Under the current budget, the state pays a base level of $5,124 per student in K-12. But the per-pupil funding formula is complex: If your child is in a remote school district where transportation costs are high, per-student funding is added to the base level. In the urban districts of Minneapolis and St. Paul, there are substantial increases in per student funding because the formula gives credits based on poverty and special-language needs.

Republicans likely will insist that "equity" means that the disparity in per-pupil funding should be dramatically reduced, meaning they will attempt to move some money from urban areas and pass it down the road to a suburban or rural district.

With line-item power on the massive education budget, they also will go after such things as after-school and adult-ed programs.

"There's a difference between necessities and niceties," Republicans have been fond of saying.

The Republicans will say their cuts "shouldn't hit the classroom," which is their way of saying K-12 has been held harmless.

They also will offer up such legislation as the proposal to "freeze" all teacher wages in the next two years as proof that they're helping local school districts. It should be noted that, according to the Department of Education, 50 percent of the state's districts already have reached freeze agreements with their teachers in negotiated settlements.

Gov. Mark Dayton
Gov. Mark Dayton

(The Dayton budget proposal called for a minuscule increase in K-12 spending, including $28 million for funding all-day kindergarten programs in districts where poverty is greatest. That won't be part of the Republican approach.)

Reviving vetoed cuts
OK, so the deficit is down to $3.1 billion. What next?

In its first $1 billion cut proposal offered up by Republicans earlier in this session (legislation that was vetoed by the governor), there were $100 million in cuts to the University of Minnesota and MNSCU. Surely, that will come back in a final proposal, meaning the deficit has been cut to $3 billion.

Additionally, Local Government Aid is certain to be a Republican target. In that first piecemeal budget proposal, they proposed cutting LGA by $487 million, roughly half of what remains of a program that has taken hits for years. Re-passing that cut brings the deficit down to $2.5 billion.

There will be legislation pushing for reductions in the state workforce. There will be proposals to cut supervisory and management positions. There will be hiring freezes, cutting of travel budgets and restrictions on purchases of everything from new computers to new vehicles.

All of these things will amount to chump change that will do little to fill that $2.5 billion hole. There will be vague promises of "reforms" that the majority will claim will save $200 million.

And watch for some sleight-of-hand shifting of money from one pot to another. For example, last session some Republican legislators said that some Legacy Amendment funds were duplicating some DNR projects, so if agency's funds are cut the projects still would be carried out. Never mind that legacy money is supposed to be "in addition to" funds currently being spent.

That effort to use Legacy money in the general fund is showing up in all sorts of ways. For example, the governor's budget called for a $1.5 million water study, pertaining to mining and wild rice.

Grabbing Legacy funding?
The Republicans seem to agree the study needs to be done, but they're pushing for a bill in which that study would be paid for out of Legacy funding.

There are other ways the majority surely will use to try to cover some of their cuts. Despite the fact that Republican Party Chairman Tony Sutton has reminded legislators that no increases in revenue means more than just no new taxes but also includes no fee increases, watch for fees across all levels of government to be increased.

But with all of this, there's still at least a $2 billion problem and only one place to turn: Human Services. At $12.2 billion in the current budget, it is the second largest portion of state spending (behind K-12) and by far the fastest growing.

On the surface, it also seems politically the easiest to cut because, in the words of one DFL legislator, "there may be a perception that its money going to the least deserving."

The big target: Human Services
To balance the budget without increasing revenues, the "target" will have to be at least $2 billion in cuts — and that depth of cutting, DFLers believe, will create outrage across the state.

Only a small portion of the Human Services budget goes to the classic welfare family. The aging population across the state is responsible for much of the rapid rise. Payments to nursing homes, caregivers for those with disabilities, medical assistance to the working poor, and payments to clinics and hospitals account for most of the department's spending.

Even some Republican legislators expressed angst over some of the cuts Dayton made in his initial budget to some of the programs. (He restored some of those cuts, when the new budget forecast showed that the deficit was $5 billion, instead of $6.2 billion.)

Still, Human Services is the only place the legislative majority can turn to balance the budget without increasing taxes.

The targets, which are expected this week, will only be a big-picture view of the Republican plan. It's not until a final budget bill is presented at the end of the month that the specifics of an all-cut budget become clear.

"We truly are scratching our heads over how they plan to do it,'' said Sen. Scott Dibble, a DFLer from Minneapolis.

Finally, when all of this work is done, it's almost certainly headed for a veto.

And then it starts all over again.

Doug Grow writes about public affairs, state politics and other topics. He can be reached at dgrow [at] minnpost [dot] com.

James Nord, a University of Minnesota student, is a MinnPost intern.

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Comments (19)

"Finally, when all of this work is done, it's almost certainly headed for a veto."

Doug, is this based on anything from Gov. Dayton's office, or is this just discernment based on your (astute) observations?

Have you, my Republican friends, figured it out yet?

Have you figured out that former Gov. Pawlenty arranged this entire budget debacle, this conflagration you're about to wade into with no possible protection from the public's anger...

Just to polish his national political credentials with a certain small subgroup within the GOP knowing that he would NEVER have to help clean up after himself?

I suppose there's a certain justice involved in your having to deal with what amounts to a political toxic waste dump while that dump's manufacturer skips off to other places in the hopes of bigger and better things yet to come, especially since you voted in lockstep with him as he increasingly filled your political future in Minnesota with his own, personal brand of toxic waste.

It's a very hot bed of coals you're stepping out onto, but since you so fervently fanned those coals over the last few years, and you continue to heat them to white hot with your "no tax increases" pledge, I suppose it's only fair that you're the ones who have to walk across them.

But I still wonder how you could not have seen that you, yourselves, were helping Gov. Pawlenty create exactly the very difficult and damaging situation you now find yourselves in?

You couldn't have been blinded, you couldn't STILL be blinded by an illogical, faith-based (faith in uncontrolled, unfettered "free markets" as a universal panacea), evidence free ideology, could you?

You couldn't STILL be clinging to an ideology which tells you that any individual or family (as opposed to businesses or corporate executive where you take the opposite to be the case) who might need any kind of government help is made unworthy of help by the very fact that they need it and thus should NEVER, EVER get it (including huge numbers of solid, likely-to-vote, worked hard all their lives, retired senior citizens living in your own communities), could you?

Could you?

Doug,

I think it might be easier than you state. This fiscal year the state of MN spent $4.7B on the Department of Humans Services. Simply holding that number steady for the next two years would save $2.6 Billion.

The 24% increase in spending being asked for in FY 2012 seems a tad steep considering the state's population didn't go up 24% in the last year...

Heck, I'll give DHS back $600 Million of the savings, still cover your budget hole, and take my chances that $5 Billion a year DHS budget won't make the state descend into a heartless hell hole for the eldery, poor and disabled.

I don't know why Democrats are scratching their heads. Republicans have always been willing to cut services on a massive scale to everyone but billionaires. Obviously they will continue their practice of stomping on the weakest and poorest... but expand the stomp to middle class.

The Republican disingenuity is typically obvious. Citing the number of laws passed since the 70s is simply ridiculous. Arne Carlson managed to maintain a surplus despite all those laws in the 90s. So what? for some reason all the additional laws became unsustainable when Ventura Pawlenty took office and started handing out tax cuts? This is an engineered crises manufactured to turn back the clock according to ideological demands.

What, in all of these cuts, is going to bring us the "jobs, jobs, jobs" that the Repubs promised so fervently to focus on??

Are any of these committies going to look at the reports that have come out recently suggesting consolidation of services that are being supplied by all sorts of overlapping organizations so that cuts to actual services delivered aren't necessary? Or the suggestions from the non-profit report? Or are they just going to wing it?

Apparently they don't wish to plan for the future by funding early education so as to close the achievement gap. How much more research do they need to see that funding early-ed now would save us MILLIONS in the future? Oh, I forgot, Repubs don't base anything they do on scientific facts.

How much of this will end up being line-item vetoed? Or can line-item vetoing only be used on spending, not cuts??

I would like to see the secret, mysterious and magical Republican budget completed, no Democrats challenge it in committee hearings or floor debate, all Democrats vote present instead of yes or no on the bill, then Governor Dayton sign it with no line item vetoes. The budget process could be completed in April and the Legislature could then adjourn early.

A majority of Minnesota voters still believe that the consequences of the neoliberal ideology will only fall on 'the other chump'. Until Minnesota residents experience first hand the consequences of 'all for me and bleep every body else' leadership, we will still have a majority of eligible voters blindly following the false prophets who provide easy answers. Let us take it to the limit so the many can experience the desires of the few in its reality. THEN we may finally be able to have a reality based, smoke and mirror free, gimmick free discussion of what we, the people, are willing to pay for and what services we want to give up.

"The Republican disingenuity is typically obvious. Citing the number of laws passed since the 70s is simply ridiculous. "

Republicans think you can solve problems by throwing numbers of them.

This is the best description of the budget dilemma I have read this session. Looking forward to more cogency. bb

The big lie here is that this is painful for the GOP. I expect that they will righteously enjoy it.

Their view of life is now there are the producing, Christian, pro-life, job creators fighting against the DFL and their immoral and dependent minions of welfare cheats, labor and public employees.

No matter the level of government or the state of the economy, their solution remains the same - cut services for the needy and cut taxes for the wealthy.

Barry, FWIW I agree that Grow and Nord have laid it out very well.

Stuart,
I agree with your strategy. In fact, I advocated for something similar last session with Pawlenty and Emmer. They should have passed the Emmer budget and let people feel the impact for the next six months, letting them know that if they wanted more of the same, that they could elect the GOP in November.

I suspect that the election this past fall might have gone differently.

The sad thing is that the GOP will announce their budget targets, but will have no announcements of magical reforms that will enable $5 billion in savings with almost no loss of services. Just like they claimed with last year's general medical assistance "reform". They will set up unworkable systems, then pass the blame to others for implementation failure.

The Republicans' have big plans for American voters because thats what they were paid to do, look who standing at the side of WI Scott Walker, the same Billionarie that will stand by the side of this Governor.
Paul Ryans' plan is to cut Social Security,Medicare,Medicaid, and Defence spending, this the plan. Which doesn't seems right, being thath the contractors out numbered our solders in the Iraq and Afgan. War, and were paid more than our Solders.
Charles and David Koch owns the Republicans Party and will be able to influence them due to huge sum of money donated.
The Rnc National Commettee lunches an ad aimed at the Unions, they say the Unions put President Obama in the White House. This is what they want the voters to beleive so they will forget about Charles and David Koch and his 85 Freshman elected in Nov.2,2010. Look at them the Freshman are fighting with the establishment in the HOUSE.
You can't get exact count of just how much money these brother have donated to the Republicans Party, starting back when G.W.Bush was in the office.

I agree that it would be nice just to let the Republicans have their way with their "all cuts" budget except for one small fly in the ointment.

DEAD PEOPLE.

A fair number of people would die for lack of shelter, food, and medical care.

I just can't quite go that far.

It is a lot easier to propose realistic spending targets when you do not have "special interests groups" that need to be "paid-off" for their DFL campaign contributions.

I find it astonishing that otherwise intelligent people, as many Republicans are, can believe the nonsense they are taught by the anti-tax/anti-worker/anti-poor/people crowd. They seem actually to believe that cutting government won't really hurt people -- that there won't be disabled people whose home care assistance is cut even though they need such services from early morning until bedtime. Would they understand if one of the people cut was their adult child?

They also yap about Social Security, as though it actually affected the budget even though its SELF-funding is entirely separate from any monies that are appropriated. (If it needs fixing to avoid a shortfall in the future, all we have to do is tax all income, not just the first $100,000.)

And they hate unions because, without the ability to support one another by bargaining collectively, each employee would be on his/her own as employers with ALL the money and ALL the power decided how little they would be paid (third-world salaries) and how vacations and the eight-hour day could disappear for all workers.

Thank God for Governor Dayton and all the good DFL (and moderate Republicans when they realize the dilemma we face) members in the legislature.

Please protect the rich from a progressive income tax. Leave all the tax credits and deductions as they are because even millionaires need new boats and pick up trucks. Tax credits for corn scams should remain off the chopping block. Please don't cap all public pensions at $100,000 per year...think of the starving politicians who are already collecting on their first public pensions!
Thank you to the MCCL for electing these fine republicans and creating the fine mess!(Your cor[porate sponsors are happy!)

Of course the other thing one has to keep in mind is the simple fact that the Republicans can't be expected to really balance the budget because that's not the plan in the first place. Republicans like deficits, that's why they keep creating them. Deficits are all part of the strategy of perpetual crises. The main reason we haven't a truly balanced budget much less a surplus in the last 8 years is Pawlenty didn't want it. I would expect Republicans to suddenly change course and start producing viable budgets at this point.

Two words: Citizens United.

The ultimate payoff.

Mean to say: I wouldn't expect Republicans to produce a viable budget in #17. Sorry me fingers are slower than me brain.