House and Senate budget targets include investments, but also harmful cuts to health and human services

The budget targets released by the House and Senate last week invest in many of the building blocks of our economic future, but also call for cuts to health and human services that could harm Minnesota’s most vulnerable residents.

The targets specify how much each of the House and Senate finance committees can spend in the FY 2014-15 biennium. Releasing the targets is a significant milestone in the budgeting process, both because it gives the public a look at legislative priorities and because it gives the finance committees the green light to put together their omnibus budget bills.

There are many similarities between the House and Senate targets. Both propose to raise enough revenues to cover the $627 million deficit for the FY 2014-15 biennium, end the cycle of budget deficits and service cuts, and begin to invest in the state’s future. While the details of how the revenue will be raised is still to be determined by the tax committees, an income tax increase on the highest-income households similar to Governor Dayton’s proposal is likely to be included in both the House and Senate tax bills. The House also proposes a temporary income tax surcharge on the wealthiest Minnesotans in order to pay back the school funding shift more quickly.

Education is the highest priority for both the House and Senate, with both committing more than half of their new investments to E-12 and higher education.

  • E-12 education: The House increases funding by $550 million in FY 2014-15, and the Senate increases funding by $486 million.
  • Higher education: The Senate increases funding by $263 million in FY 2014-15, and the House increases funding by $150 million.

The House and Senate also make a commitment to reducing property tax pressures: the Senate committing $464 million to aids to local governments and property tax refunds, and the House $250 million.

The House and Senate each also distribute more than $200 million among other budget areas, including economic development, housing, public safety, judiciary, agriculture, state agencies and veterans affairs.

The target for health and human services, however, left many stunned. Both the House and Senate propose cutting at least $150 million from this area of the budget, leaving vital services like health care, nursing homes, work supports for low-income families, and services for people with disabilities at risk.

The decision to cut funding for health and human services is in stark contrast to Governor Dayton’s recent budget proposal that made $210 million in additional investments in the next biennium, using the resources to reverse past cuts and make strategic new investments. The House and Senate targets will force the committees to consider cuts to vital services that help Minnesota families as they struggle through the slow economic recovery.

Now that targets have been released, look for the finance and tax committees to begin putting together the details of their omnibus bills. The Legislature is on break for the Easter and Passover holidays and returns Tuesday, April 2. When they return, legislators will have to meet an April 19 deadline for finance committees to approve their omnibus budget bills.

-Christina Wessel

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