The legislature has set about to solve the state’s $5.0 billion deficit through an all-cuts approach. In order to meet this challenging goal, the House and Senate budgets include some significant reform efforts that are expected to save the state hundreds of millions of dollars. But what happens if these reforms don’t produce the savings that legislators are booking in their budget bills? Interestingly, the House and Senate bills turn authority to resolve any remaining shortfalls over to some of Governor Dayton’s appointed commissioners.
There are several of these provisions; here are a few examples:
- In the House state government bill, legislators ask the Department of Revenue to raise $133 million by employing tax analytics and business intelligence tools to identify businesses and individuals that are not paying the taxes they owe. If the department fails to meet this target, then the commissioner of Management and Budget is instructed to reduce funding for state agencies to make up the difference.
- The House health and human services budget bill seeks permission from the federal government to reform the Medicaid program, saving an expected $300 million. In a recent letter from the Department of Human Services and Minnesota Management and Budget, the commissioners state that the federal government is unlikely to grant such a waiver. If this federal waiver doesn’t come through, the House instructs the commissioner of Human Services to reduce reimbursement rates for health care providers until $300 million has been cut.
- On the Senate side, the state government bill seeks $475 million in savings from reducing full-time staff, eliminating deputy and assistant commissioner positions, and other cost-saving measures. However, if the specified provisions do not achieve the expected savings, the commissioner of Management and Budget must reduce funding for “executive and judicial branch agencies” until that savings goal is reached.
Perhaps these reforms will succeed and save the state hundreds of millions of dollars, but it’s very possible that they won’t. And if they don’t, then the state faces a situation where the authority to cut services is given to commissioners with no direct accountability to the voters. The House does not stipulate any process for legislative oversight or public input into these decisions. The Senate at least requires the commissioner of Management and Budget to report to the legislature the reductions to each agency. However, that still leaves some important questions: Will there be an opportunity for stakeholders to share their concerns before services cuts are implemented? How will the public be notified once any decisions have been made?
And authorizing the executive branch to make sweeping budget cuts may also violate Separation of Powers. House File 130, which passed earlier this session, asked the Dayton administration to make $100 million in unspecified cuts to state agencies. In his veto letter, Governor Dayton pointed out that this approach was “inappropriate and unconstitutional.” His letter refers to the recent unallotment court case:
In that case, the Court construed the unallotment statute to avoid a clash with the doctrine of separation of powers. In his concurring opinion, Justice Alan Page, joined by Justice Paul Anderson, warned that the Constitution does not give the executive “virtually unfettered discretion to decide which funds to cut entirely, which to reduce in some measure, and which to leave fully funded.” These decisions, said Justice Page, “inevitably change the legislative priorities established in the properly enacted laws.”
Legislators will continue to pass budget bills off the House and Senate floor in the next few weeks believing that they are solving the budget problem in one way, but what actually happens in the next two years could turn out to be very different. There is always an element of uncertainty when policymakers put together their budgets, but the goal should be to minimize that uncertainty and ensure that there is maximum transparency, public input and accountability for budget decisions.
-Christina Wessel
