House budget targets give some answers and leave questions

Minnesota policymakers entered the 2016 Legislative Session with a projected $900 million surplus for the remainder of the current FY 2016-17 biennium and $1.2 billion for FY 2018-19, allowing them the chance to make important investments in a broader and more durable prosperity.

However, the Minnesota House of Representatives released partial budget targets yesterday that indicate that only $2 million of the surplus will go toward areas of the budget besides transportation. A press release indicates that tax cuts and transportation spending will be the priority for the surplus, although the budget resolution does not specify budget targets for these two areas. The release also provides some details about specific funding priorities, but also demonstrates that those new investments will be funded by shifts and reductions in other areas.

The targets are an important milestone in the budgeting process, as they set the size of the omnibus budget bills that the House finance committees will need to put together by April 21. These bills will describe proposed changes to the state’s two-year budget passed last year.

House of Representatives General Fund Targets (Net)
Jobs and Energy $12 million
Environment and Natural Resources $3.9 million
Capital Projects $0
E-12 Education $0
Health and Human Services $0
Higher Education $0
Public Safety -$1 million
Agriculture -$1.9 million
Debt Service -$3.1 million
State Government -$9.5 million
Other Bills $2 million
Net Changes in Spending $2 million

Among the budget areas receiving targets yesterday, the area getting the largest target is Jobs and Energy, with its $12 million net target to include investments in broadband in Greater Minnesota.

The House indicates that the Agriculture, Public Safety and State Government committees will reach their targets primarily through carrying over or transferring money and finding efficiencies within their juridictions. The House proposes no net changes in Higher Education. And while E-12 Education and Health and Human Services each has a $0 target, the House indicates that there will be $50 million in additional spending in K-12 spending that is offset by changes elsewhere in the E-12 budget, and there will be “repurposing” of funds within Health and Human Services.

Taxes and transportation did not receive targets yesterday. These are the two areas where little action was taken in 2015, and where the Legislature has reconvened conference committees whose starting point for negotiations are last year’s bills. Last year’s House tax bill contained $2 billion in tax cuts, and grew dramatically over time because it contained a number of phased-in tax cuts.

The targets released today make it clear that the House holds a very different vision than Governor Mark Dayton, whose supplemental budget proposal released last month included sustainable tax reductions focused on working families, investments in broader economic opportunity, and funding boosts for services for some of the most vulnerable Minnesotans. The Senate is expected to release their targets later this month.

-Clark Biegler

About Clark Biegler

Clark Biegler is the Minnesota Budget Project's policy analyst.
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