Some health and human services programs see higher cuts under revised unallotment plan

Yesterday, MPR’s Polinaut blog broke the news that the Governor has made a few changes to his unallotment plan (see the letter Minnesota Management and Budget sent to Legislative Advisory Committee members following up on last week’s LAC meeting – and don’t forget to read the attached appendixes).

There is a close to $4 million increase in cuts to health and human services, where some services are facing larger reductions and some cuts are smaller. They include:

  • Greater cuts to county mental health grants.
  • Reduced cuts in state funding for chemical dependency services. The Governor removed meth abuse treatment grants to counties from the unallotment list (cuts to funding for fetal alcohol syndrome treatment remain unchanged).
  • The reduction in personal care attendant hours remains the same, but the amount of the unallotment reduction was apparently calculated incorrectly initially. The updated figures reduce the unallotment cut considerably – from $7.5 million to $2.2 million.
  • Restored some cuts to funding for American Indian child welfare to the White Earth Band of Ojibwe.
  • New cuts of $6 million to services for people with developmental disabilities – there will be a temporary suspension in the growth of payments to counties for developmental disability services.

The MMB letter also provides estimates assuming that the cuts in aids to local governments will result in property tax increases, and as a result, there will be a $6 million impact on the state in FY 2011 from higher property tax refunds paid by the state and lower corporate and individual income taxes collected (because there will be higher deductions for property taxes paid).

In the letter, Commissioner Hanson also notes that most state agencies can expect a 2.25% operating budget reduction for the biennium. Plans for reaching those reductions are still being developed.

Appendixes to the MMB letter provide more information on the impact of the unallotment cuts:

  • The state will lose $72 million in federal funding for health care due to the unallotment cuts in Medical Assistance (MMB notes that $365 million in federal money was lost due to the HHS bill enacted during the legislative session).
  • The average Renters’ Credit refund for seniors and people with disabilities would be reduced by $144 (28 percent of Renters’ Credit recipients are seniors or people with disabilities). For all recipients, the average reduction will be $129. We discussed this issue yesterday on our blog, citing a recent MPR story in which a retired Korean War veteran interviewed said he uses his Renters’ Credit to help pay for his home health aide and other basic needs.
  • The letter includes additional information about the nuts and bolts of the school district property tax levy recognition shift.

I’m sure the new information and the modifications to the unallotment plan will be discussed on Tuesday’s (June 30) Legislative Advisory Committee meeting at 10:00 a.m. in Room 15 of the State Capitol. The state economist Tom Stinson will also be there to answer questions regarding job losses associated with the unallotment cuts. I’ll blog on what happened at the hearing.

-Katherine Blauvelt

About Katherine Blauvelt

Katherine Blauvelt served as the Minnesota Budget Project’s policy analyst from 2007 to 2009.
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One Response to Some health and human services programs see higher cuts under revised unallotment plan

  1. Nan Madden says:

    The LAC meeting will be webcast live and later added to the video archives – visit http://www.senate.mn/media/

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