Gov. eyes health, city aid cuts

ST. PAUL -- Minnesota's cities, counties and poor residents needing health care would be most affected by Gov. Tim Pawlenty's plan to balance the state budget.

No tax hikes
Gov. Tim Pawlenty announces Monday how he will cut $1.2 billion to balance the state budget. Also pictured is Management and Budget Commissioner Tom Hanson. Tribune photo by Don Davis

ST. PAUL -- Minnesota's cities, counties and poor residents needing health care would be most affected by Gov. Tim Pawlenty's plan to balance the state budget.

Even before Monday's $1.2 billion proposal, Pawlenty cut $2.7 billion from the current budget last summer, bringing total spending for the two years to just above $30 billion.

The Democratic-controlled Legislature must approve budget changes, and many say they need to raise taxes to keep services at acceptable levels.

The governor has said all along that he refuses to allow any state tax increases.

"The historic drop in the economy has caused an historic drop in state revenues," Pawlenty said. "Government has to live within its means by setting priorities and tightening its belt just like everyone else."


Most state agencies would experience a 6 percent cut under the plan.

Among Democrats' biggest complaints was about the $387 million health-care cut that would be replaced with federal money. The federal funds, part of a health-care reform bill, have not been approved and Pawlenty said he would need to revisit the issue if the funds are not forthcoming.

"It is a budget that is balanced only if we get money from the federal government," House Majority Leader Tony Sertich, DFL-Chisholm, said.

Nursing homes would see a 2.5 percent drop in state payments.

The major MinnesotaCare budget cut would be to adults without children. While the poorest still would be eligible for the state-subsidized health insurance, an estimated 21,500 would lose coverage. Those remaining on MinnesotaCare would pay higher premiums.

The Pawlenty proposal would delay $1.8 million due in March for rural hospitals until July. The plan also would eliminate a number of other health programs, ranging from grants for mentally ill children to those providing drug and alcohol abuse prevention programs for American Indians.

Cuts to elderly services will hurt in a time when more Minnesotans are reaching nursing-home age, senior advocates said.

"The current infrastructure for older adult services is shaky at best -- at a critical time in this state," said Patti Cullen, of Care Providers of Minnesota. "In preparation for the upcoming age wave, we must prioritize older adult services and strengthen the core service delivery system for older adult services. Minnesota cannot sustain the increased demand for services if we continue with our current payment and delivery system."


While mostly making cuts, Pawlenty proposed an increase of $1.4 million next year for the Fergus Falls Veterans' Home so it can open an addition sooner than expected.

The governor would cut some business taxes.

Fees would raise little under the governor's proposal, but some money brought in by fees would be transferred from specific funds to the state general fund.

Pawlenty would change some state boards, such as one promoting film and television production, to private nonprofit status.

The governor said that he set priorities when he made his proposals, but federal rules tied his hands. The Republican governor said he would have cut higher education funding more than he did, but since the state accepted federal funding last year rules limited how much he could cut.

As for city and county aid, Pawlenty said those programs just are not as important as ones he saves, such as public schools, the military, veterans and public safety.

The head of the League of Minnesota Cities called local cuts "catastrophic." Jim Miller said that without state tax increases, cities will have no options other than to raise property taxes or cut services.

Cities already have cut budgets, he said, and there is little left to cut.


"The governor's proposal will be devastating to Minnesota communities," Cloquet Mayor Bruce Ahlgren said, speaking for the Coalition of Greater Minnesota Cities. "If this is passed, Minnesotans need to brace for deep reductions in snowplowing and pothole repair, fewer police and firefighters, closed libraries, closed parks and closed community swimming pools."

Ahlgren called Pawlenty's proposal reckless.

Davis reports for Forum Communications Co.

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