**Update: Read our blog post – Legislature challenges Governor’s unallotment decisions – about the legislature’s response to the Governor’s unallotment proposal.**
When the 2009 Legislative Session ended on May 18, the state was still left with a $2.7 billion deficit for the next biennium. This afternoon, Governor Pawlenty announced his plan for solving that remaining deficit through unallotment. He described his announcement as a proposal, not a finalized plan.
Some of the major components of the unallotment proposal include:
- K-12 education – shifts $1.8 billion in payments to school districts
- Higher education – $50 million cut to University of Minnesota and another $50 million cut to MnSCU
- Local government aid – $300 million in reductions to cities, counties and townships
- Renters’ credit – $51 million in reductions, a 27% cut
- State government – $33 million in cuts to state agency operating budgets
- Health and human services – There are 28 separate unallotment proposals for HHS, totaling $236 million. Some examples include reducing children and community services block grants by 25%, reducing payment rates for various health care providers, suspending increases in provider payments, delaying all continuing care grants by one month, paying for Transitional MinnesotaCare from the Health Care Access Fund instead of the general fund, and ending General Assistance Medical Care one and one-half months sooner.
Also, the Governor has encouraged the public to respond to his unallotment proposal by emailing email@example.com.
Remember, however, that the Governor does not need to use unallotment to bring the state’s budget back into balance. There are other options for solving the problem.
- The move is unprecedented – only two other governors (besides Pawlenty) are known to have used their unallotment authority (Quie and Perpich). And it has never been used at the beginning of a budget cycle or to solve a budget deficit this large.
- The action is also unnecessary. It is not uncommon for the legislative session to end without a complete budget in place. The normal course of action is to call a special session so that our elected representatives can negotiate a balanced budget solution with more public input.
- And unallotment will cause a great deal of pain for low-income families, but still fail to solve our underlying budget problems. The Governor can only cut spending in the FY 2010-11 biennium, but our state faces a projected $3.1 billion deficit for the FY 2012-13 biennium. We need a long-term solution to our budget problems, not a one-time quick fix.
Given that the Governor’s unallotment action is unprecedented, unnecessary and fails to address our underlying budget problems, the state would be better off if the Governor worked with the legislature to negotiate a balanced solution to the situation – a solution that uses a combination of spending cuts and revenue increases to eliminate our long-term deficits.
What happens next?
- Tom Hanson, the Commissioner of Minnesota Management and Budget, will be presenting the Governor’s unallotment plan to the Legislative Advisory Commission this Thursday afternoon (3:00 p.m. in Room 15 of the Capitol). This is an informational hearing only; the legislature has no authority to change or reject the plan.
- Starting July 1st, the first day of the FY 2010-11 biennium, the Governor can begin implementing his unallotment plans.