Senate budget targets call for few investments, mostly flat funding

Clark Goldenrod
Apr 04, 2019
The Minnesota Senate's budget targets, released last week, give a high level picture of their budget outline. The Senate's "Advancing Minnesota" budget makes new investments primarily in education and health and human services, leaving most of the budget areas with the same amount of funding as projected in the February Forecast.

The targets are an important milestone in the budgeting process. They set the size of the Senate's omnibus budget, tax, and bonding bills. Each legislative body sets their own targets, and the House released their targets last week. Proposed targets describe the net changes to state general fund spending in each area, and could also reflect revenue increases or transfers between funds.

Senate General Fund Targets (net changes) FY 2020-21
E-12 Education $206 million
Health and Human Services $147 million
Higher Education $100 million
Agriculture, Rural Development, Housing $30 million
Judiciary and Public Safety $25 million
Energy and Utilities $0
Commerce and Consumer Protections $0
Veterans and Military Affairs $0
Transportation $0
Jobs and Economic Growth $0
Capital Investment, Debt Service $0
State Government and Elections -$16 million
Environment and Natural Resources -$57 million
Taxes $0
Other Bills -$18 million
Total $417 million

The largest proposed target is in E-12 education. Senate leadership has indicated that some of this target will go to school safety. In addition, the Senate lists mental health, elder care, and child care as priorities. They also indicated that their budget will not maintain the provider tax, a major funding source for health care for about 1 in 5 Minnesotans.

Many of the Senate's targets are $0, meaning that they include no additional spending over the FY 2020-21 baseline. Unlike the governor and House - who commit to raising additional dedicated funding for transportation and reducing general fund spending in that area - the Senate leaders say their transportation plan will solely rely on existing funding.

The targets leave some important questions unanswered. The total changes add up to $417 million, substantially less than the $1.1 billion surplus projected for FY 2020-21. It's unclear whether the remainder would be left unspent "on the bottom line," or used in some other way. Another key question is what the Senate has planned regarding revenues. The Senate's budget plan includes a target of $0 for their tax bill, which they describe as a tax conformity bill. However, their targets also indicate that their FY 2020-21 budget will bring in $557 million less in general fund revenues. It's unclear how this would be achieved.

Stay tuned for more analysis of how the pieces of the budget bills come together.

-Clark Goldenrod