ST. PAUL, January 18, 2011 — Minnesota House and Senate Republicans today introduced an early action budget bill that takes immediate steps to reduce the budget deficit by $1 billion. The bill reduces spending for state agencies by $200 million in the current budget while making other one-time spending cuts permanent, reducing the long-term deficit by another $840 million. The early budget bill represents the first phase of the Minnesota Legislature’s budget balancing plan for the next two years.
“We need to prevent automatic spending increases that are included in the state government budget, and passing this budget bill will keep some of state government’s expenditures at current levels,” said House Ways and Means Committee Chair Mary Liz Holberg, R-Lakeville. “For the most part, the budget bill includes spending levels that were approved by the DFL-controlled Legislature and Republicans at the end of the 2010 legislative session,” said Holberg.
“In light of the large forecasted budget deficit, I believe most cities, counties, and public higher education institutions have been expecting these budget reductions to continue,” said Senate Finance Committee Chair Sen. Claire Robling (R-Jordan). “This action should not come as a surprise to them or to the majority of legislators who voted for these reductions last year.”
“This bill is fiscally responsible and is the first step toward balancing the budget,” said House Speaker Kurt Zellers, R-Maple Grove. Zellers said the Legislature will act quickly on the first phase of the budget balancing plan, giving it hearings this week and next and having it on Governor Dayton’s desk in early February.
The first phase of the budget balancing plan would cancel the return of the Political Contribution Refund program that uses tax money to refund political contributions up to $50 for individuals and $100 for couples, saving $11.8 million. It also keeps local government aids and credits, MnSCU and the University of Minnesota at Fiscal Year 2011 levels.
In the current budget that ends June 30, 2011, the bill gives the Minnesota Management and Budget commissioner the directive to reduce state agency spending by $200 million to prevent a “Christmas in June” for agencies that spend excess money in order to protect their total level of funding.
“We have seen that government spending continues to increase even in the face of tight economic times. We need to send a message to state agencies that it is time to stop all non-essential discretionary spending,” said Holberg. “A dollar saved now will allow the legislature to re-examine spending priorities and ensure that government budgets reflect the spending priorities of taxpayers and the state,” added Holberg.
Republicans included a provision to keep the K-12 general education formula, special education funding and further reductions to higher education off-limits from the $200 million reduction. Constitutional offices and the Legislature will also see a reduction to their current budgets.