Now that the dust has settled from the Governor’s unallotment plan, people have come to realize the budget cuts are not what many had anticipated.
In health and human services, cuts are in the general fund only. Despite dire predictions, total spending on health and human services actually increases by 13.9% in fiscal year 2010-11 when you add in stimulus and other funds.
The cuts to local government aid are split 1/3 this year and 2/3 next year to allow planning, and counties of less than 5,000 people and towns less than 1,000 are exempt.
The K-12 funding shift and higher education cuts will certainly force difficult budget decisions, but most people agree education can tighten its belt too.
The vast majority of people I have heard from support the Governor taking the lead to balance the budget, and I am pleased to have been part of that effort.
Rep. Keith Downey
District 41A, Edina
323 State Office Building
100 Rev. Dr. Martin Luther King Jr. Blvd.
St. Paul, MN 55155
Office: 651-296-4363 rep.keith.downey@house.mn
1. Health and Human Services
2. General Assistance Medical Care
3. Local Government Aid
1. Health and Human Services
Final HHS spending totals include the Governor's line-item veto of General Assistance Medical Care in 2010, the June 16, 2009 Governor’s funding unallotment, and the 2009 Omnibus HHS Finance Bill (HF 1362).
2008-09 $10.767 Billion - a 15.2% increase over 2006-07
2010-11 $12.262 Billion - a 13.9% increase over 2008-09
2012-13 $13.684 Billion - a 11.3% increase over 2010-11
These figures include state HHS expenditures, including General Fund, federal stimulus funds, TANF, and the Health Care Access Fund (HCAF).
I know you hear about "cuts", but that's government-speak for not being able to increase as much as hoped. The increases for welfare and health benefits set in place 4 years ago have come home to roost. They are growing at twice the rate of state education spending growth. Left unchecked, they will grow to entirely consume our state budget.
Unfortunately, the opportunity for reform went by the wayside this year. Federal stimulus strings do not allow the state to reduce eligibility nor reform coverages. It's hard to imagine, but even with a 10-15% increases in our biennial health and human services budget, the state's only available response to growing enrollments and cadillac benefits is to reduce per-procedure reimbursements to hospitals, doctors, and other care providers.
2. General Assistance Medical Care
In spite of good intentions, GAMC unfortunately doesn't accomplish its goals. Of the 33,000 eligible recipients, all adults with no children, only 16,000 are active at any point in time. The recipients are indigent and large numbers suffer from mental illness. We spend over $300 million per year, over $20,000 per active enrollee, through GAMC.
Most recipients do not sign up for GAMC, partake in checkups and preventive care, and then manage their health care. Instead, they present in emergency rooms, at which point the hospital treats them and they are then enrolled in GAMC; they typically then will not show up for a period and are dis-enrolled; then at some point they present again at an ER and we repeat the process! The 16,000 enrolled at any given time are largely those who happened to have shown up and been enrolled recently. There are exceptions of course, but this is the situation for the vast majority.
In fact, the program essentially works like an (inadequate) uncompensated reimbursement to hospitals, but with the administrative overhead and claims paperwork of a complete health plan. The program does not provide anywhere near the care or reimbursement required.
It is a bad plan for the patients, it is a bad plan for providers and it costs more than private health insurance, making it a terrible plan for taxpayers.
GAMC costs were projected to grow 35% in our biennial budget. And because GAMC is state funds only, federal funds that pay for Medicaid, or 50% MNCare are lost when those patients are enrolled in GAMC rather than a program with federal match.
I supported the Dean amendment to the health and human services bill, which would have applied for a federal waiver to include up to 75% of current GAMC recipients in MnCare, and for the remainder provide a fee based care model for the hospitals who see these patients, but the amendment was never allowed to be offered on the house floor.
Absent any GAMC reform in the unbalanced budget passed by the DFL-controlled legislature, the Governor line-item vetoed GAMC funding starting in year two.
I voted to uphold the Governor's line-item veto of the second year of GAMC, because these people are poorly served by this big-government program whose cost is out of control. It needs to be reformed, and now we have a definite incentive to do so over the next year.
3. Local Government Aid
Reductions in local government aid (LGA, county program aid and market value homestead and agricultural credit) are $99.7 million in FY 2010 and $200.3 million in FY 2011.
When you hear about reductions to local government aid, remember Minneapolis receives by far the most Local Government Aid of any city. Small cities with low property values use LGA to provide truly basic city services, yet they are disadvantaged when cities like Minneapolis waste money but still receive massive amounts of state aid. Suburbs like Edina typically receive no LGA.
The reduction is structured based on a jurisdictions' levy plus aid and is distributed 1/3rd to counties and 2/3rds to cities and townships. The aid payment reductions are structured to exclude the smallest and poorest tax base jurisdictions. In addition, the reductions for cities and townships include a per capita cap. No city's reduction exceeds 3.31 percent of annual aid plus levy for 2009, and 7.64 percent of annual aid plus levy for 2010. No township's reduction exceeds 1.74 percent of annual aid plus levy for 2009, and 3.66 percent of annual aid plus levy for2010. Cities and townships under 1,000 population and with a tax base below average would not receive any aid reductions (454 of smallest cities and 629 of townships excluded from aid reductions). 5 counties with population of approximately 5,000 or less would not receive an aid reduction. No county would receive an aid reduction of more than 1.19 percent of each county's annual aid plus levy for 2009, and a reduction of no more than 2.41 percent for 2010.
With hundreds of Millions of dollars at stake, it is no surprise that Minnesota local governments spent a total of $8,550,018 on lobbying activities in 2008. This represents an increase of $732,398, or 9.4 percent, over the amount spent in 2007. To view the complete report, go to: http://www.auditor.state.mn.us/default.aspx?page=20090610.000.
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“Keith Downey is exactly what we need in St. Paul to advance our state.”
