Spending cuts an important part of budget solution

The budget discussion continued at the Capitol this week, with most of the focus on the Governor’s proposal that was released last week. Right now, that is the only budget plan we have to analyze. The House and Senate will release their ideas to solve the $6.2 billion shortfall after the state’s new economic forecast is released Feb. 28.

That forecast will present a better indication of the state’s economic status for the new budget cycle that begins July 1. It will add any additional revenue the state received since November and take into account any changes in the state and national economies.

It will be good news if the forecast predicts a smaller budget deficit, but it’s unlikely that it will be enough to make much of a difference. Minnesota is facing a $6.2 billion deficit today, the largest in state history. That’s one-fifth of the entire state budget that is unaccounted for. Even a $1 billion improvement on that number still would leave the state several billion dollars short.

Given that information, it’s evident that a combination of serious spending reductions and new revenue will be needed to responsibly solve the problem, no matter what next week’s news reveals. The new revenue included in the Governor’s budget plan has received a lot of attention, but it’s important to remember that he also has proposed more than $2 billion of very serious budget reductions.

Spending cuts are an important piece of this budget solution, but it’s going to be the legislature’s duty to listen to people who will be impacted by all proposed cuts and decide whether they are smart for Minnesota. For example, I’m troubled by potential cuts to nursing homes included in the governor’s budget. It’s an attempt to reduce state costs in one of the fastest-growing areas of the state’s budget, but I’m worried about what that could do to our facilities, particularly in Greater Minnesota.

I believe there may be a better solution to control health care costs now and in the future, and finding those alternatives will be the main goal during the next few weeks. I think it’s clear that any solution will be painful, however. Stabalizing our immediate budget and future budgets will require a big change in how the state spends and collects its money. It’s impossible to cut spending to more sustainable levels without impacting some of the services we all rely upon.

That’s why it’s so important for people to remain engaged in this budget discussion, and to provide input on what’s being proposed. Some budget bills are scheduled to be finalized by the end of March, meaning these decisions will be made very quickly. Committee and Floor activity can be monitored at www.senate.mn, or feel free to contact my office to receive updates on anything happening at the Capitol.

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Senator Rod Skoe
Rod Skoe represents District 2, which includes all or portions of Becker, Beltrami, Clearwater, Hubbard, Lake of the Woods, Mahnomen, Otter Tail and Wadena counties in the northwestern part of the state. He chairs the Tax Committee.

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