I was on hand Friday afternoon to watch the Governor release his supplemental budget proposal. As expected, it relies a mix of spending reductions, tapping other funds and using reserves…and “no tax increases.”
The main mechanisms for solving the state’s $935 million deficit include:
$341 million in spending cuts – including $187 in health and human services
$250 million from the budget reserves
$250 million from the Health Care Access Fund (HCAF)
$92 million in federal TANF (Temporary Assistance for Needy Families) funds
By using funds from HCAF and TANF to fill the budget deficit, the Governor’s proposal is redirecting resources that could be used to help improve low-income families’ access to health care, child care and employment services. State funding that helps Minnesotans get and keep jobs should not be redirected during an economic downturn.
And, although the Governor’s proposed budget would solve the deficit for the current biennium, it still leaves a large hole in the budget for the next biennium – $693 million (plus another $1 billion if you include inflation).
In our press release Friday morning, we argued that policymakers must approach the state’s current fiscal problems in a long-term way. The Governor’s budget proposal relies too heavily on one-time fixes ($592 million of it) without implementing a plan that would get the state back on the path to financial stability. Unfortunately, with taxes off the table, any solution that’s proposed is likely to fall short.
Watch our blog in the coming days as we start to dig into the details of the Governor’s proposal!