On Wednesday evening, the House Ways & Means Committee passed the budget resolution, which officially sets the “targets” for each area of the budget. This year, every budget area is receiving a negative target – meaning the committee will need to cut that amount from their budget. In reality, we already knew the targets for most budget areas – they were revealed last Friday when the House Finance Committee assembled an omnibus bill that included nearly every committee (see our blog post summarizing that proposal and listing the targets). However, the big question was what were the targets for K-12 education and health and human services? Well, now we have an answer.

K-12 education. A cut of $1 million. That’s not a typo…it’s $1 million.

Health and human services. The bottom line is $719 million, but there are five pieces to this:

• $408 million – the amount of enhanced federal match for Medicaid spending (FMAP) that policymakers are pretty confident we will receive from the federal government. It’s important to note, however, that Congress hasn’t approved this yet.
• $147 million – the amount the compromise bill to preserve General Assistance Medical Care (GAMC) will save the general fund. This is a little complicated, but here is what is happening. The agreement to preserve GAMC will save money in the Health Care Access Fund (HCAF) because thousands of adults without children will not be moved onto MinnesotaCare (which is funded by the HCAF). That prevents the HCAF from running a deficit this biennium. As a result, the general fund will not have to transfer $99 million to the HCAF to fill in the hole. In addition, since the HCAF will no longer have a deficit, the state will be able to transfer a planned payment of $48 million from the HCAF to the general fund. Add that up and you get $147 million more for the general fund.
• $155 million – the amount of cuts from health and human services (yet to be determined).
• $7.5 million – the amount of cuts to early childhood programs (yet to be determined).
• $1.6 million – the amount of cuts to public health programs, basically the Department of Health (yet to be determined).

Also of note:

• Taxes has a target to cut $105 million. The House released a bill on Tuesday night proposing $105 million in cuts to aids and credits for local government. We’re writing a blog post focusing on that proposal.
• Capital investment has a target to cut $350,000. Where does this come from? Well, the Governor line-item vetoed $200 million from the legislature’s bonding bill, reducing the size of the bill to $717 million. This ended up being a smaller bonding bill than assumed by the state’s February Forecast. As a result, the state will be paying less in interest than anticipated, resulting in $350,000 in general fund savings.

-Christina Wessel

Filed under: Budget Process, Budget Proposals