State Sen. Dick Cohen, DFL-St. Paul, expressed his extreme distress with the budget being proposed by the Senate State Government Innovations and Veterans Committee. The chair’s recommendations include several proposals that are purported to provide cost-savings; however, these proposals either do not have or do not match the official fiscal analysis.
Recently-completed fiscal analysis of two such provisions shows that original GOP estimates were off by nearly $80 million.
“You simply cannot make up a number and book it in your budget. We are trying to balance a $5 billion deficit—we need to account for every dollar being cut or raised. Throwing fake numbers into a budget proposal is simply unprecedented.”
A questionable budget proposal would have the Department of Administration enter into an outside contract for “strategic sourcing”—ways to save money on procuring goods and services. The vendor would receive performance pay based on the savings they provided the state.
“The budget randomly attributes $46.2 million in savings to this proposal, yet a recently completed fiscal note reflects only $222,000 in savings per year,” said Sen. Cohen.
Another proposal to allow the state of Minnesota to contract with the U.S. Secretary of the Treasury to collect debts owed to state agencies is booked to save $36.6 million in the State Government budget. The fiscal note reflects $500,000 in savings the first year and $3.8 million in annual savings thereafter.
“Again, the Majority is fudging numbers to make it look like their proposals are going to save the state significant dollars,” said Sen. Cohen.
Between the two proposals, the GOP booked $82.8 million on their budget spreadsheets. The recently-released fiscal notes show savings of $4.735 million. In total, GOP estimates were off by 1,749%.
Another questionable proposal would require the Department of Administration to enter into contracts with outside vendors for recommendations for improving building efficiency, fleet management, and tax fraud detection. Again, the vendor s would receive performance pay.
“The only estimate of savings that could be provided for the state entering these contracts is from a private business [IBM] that intends to compete for this contract. They said the state could save $490 million, yet the bill arbitrarily books $140 million in savings,” said Sen. Cohen. “Obviously, a potential contractor is going to say money could be saved, because they want an opportunity to get paid for their services. We need an official fiscal analysis before this can be included in the budget.”
The State Government Innovations and Veterans Committee will continue working on their budget in the upcoming days. The Majority has issued a deadline of Friday, March 25 at midnight to finalize their work.
“It is simply irresponsible to budget in this manner,” said Sen. Cohen. “Minnesota is in a serious budget shortfall and our citizens deserve serious solutions. Perhaps the Majority has finally realized that an all-cuts budget is impossible to deliver, but they still need to advance proposals that balance.”