Update from Representative Denny McNamara

By Rep. Denny McNamara, 7/22/2011

Hello from the State Capitol,
Minnesota’s state government shutdown has ended, and a new two year budget is in place.

It’s a shame this deal wasn’t made before July 1, because the Governor had this offer in his hands in late June. But when one side believes it has a mandate to raise taxes and the other side wants to reform government and force it to live within its means, compromising is difficult.

Here are the nuts and bolts of the plan. Governor Dayton was forced to drop all of his proposed tax increases on Minnesotans. Minnesota’s General Fund, the account that allocates revenue to state government programs, which was projected to spend $39 billion, was capped at roughly $34 billion – or the amount it’s expected to collect from taxpayers.

In exchange, the Legislature agreed to give the Governor one-time revenue from sources outside of the General Fund to spend on government programs, and agreed to fund a $500 million capital investment bill one year earlier than usual.

But the most important aspect of this agreement is the monumental government reform. Both sides understood that government can no longer continue to operate under a financially unsustainable path, and took significant action to decrease projected spending and increase government efficiency in future budget cycles.

Consider that health and human services spending was projected to take over the entire budget over the next decade. Thanks to the reforms passed on July 20, future budget targets in HHS are drastically reduced, dropping from 22 percent growth down to 4.8 percent.

This includes significant welfare reform. Under the agreement, Electronic Benefits Cards allocated to needy recipients to purchase food will now include the recipient’s name so it can’t be illegally shared with others, and can no longer be used to buy tobacco or alcohol.

There are new education reforms that will make our current K-12 system even better than it already is. Nursing home funding is protected. Veterans and military affairs programs receive funding increases.

I’m disappointed it took 20 days of a government shutdown to finalize a budget, and there are certain parts of this compromise that I don’t agree with. But from a pure fiscal standpoint, this agreement is going to save the taxpayers $2.5 billion in the future just by changing the way government conducts business and making it more efficient. And by all accounts, that’s a safe estimate.

No one was completely satisfied with this solution. Both sides gave something to get something. It was a true compromise, and it’s certainly better than the alternative, which is a continued government shutdown. Our state employees were forced to the sidelines for far too long, and both sides can take their share of the blame for this result. But the good news is the state’s budget is now in place and your state government is once again open for business.

Keep in touch,
Denny

Representative Denny McNamara
Dist.57B
Chair of the Committee on Environment, Energy
and Natural Resources Policy and Finance
375 State Office Building
100 Rev.Dr. Martin Luther King Jr. Blvd.
St. Paul, Mn. 55155-1298
Phone (651) 296-3135

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