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  • 10 Ways in 10 Days Two: Invest in people with disabilities

    by Leah Gardner | Apr 03, 2013

    of Invest in Minnesota's 10 Ways in 10 Days campaign features Nicole Atherton of Moorhead.

    Nicole Atherton is 25 years old and an active member of the Moorhead community.

    Nicole does volunteer work and holds down two part-time jobs — one at a grocery store and one providing administrative support to a nonprofit serving others with disabilities.

    Photo Woman holding plaqueShe is also working toward her next goal — moving into an apartment that would allow her to live more independently, and save the state money.

    She doesn’t let her disability hold her back, and state-funded services for people with disabilities, including job coaching and support for independent living skills, are a major reason she can do so much.

    Nicole has a bright future, thanks to the state's investment in services that keep her healthy and maintain her many commitments.

    "My goal is to use fewer services and be even more independent," she says.

    Nicole and her family understand the connection between the services she receives and the need to raise revenues to fund them. That's why they are active in advocating both for fair revenues and services for others with disabilities, which earned Nicole an Outstanding Citizen of the Year award from the Metro Area Mayors Committee for People with Disabilities.

    The 10 Ways in 10 Days campaign features people from around the state like Nicole who have first-hand experience with critical state services - and know their value. The campaign highlights how fairly raised revenue and state investments benefit all Minnesotans and why it's time for policymakers to invest in prosperity for all.

  • 10 Ways in 10 Days makes the case for investing in Minnesota

    by Leah Gardner | Apr 02, 2013

    Meet Robyn Cruey. She's one of 10 Minnesotans you're going to hear a lot about in the next 10 days.

    They are all featured in Invest in Minnesota's 10 Ways in 10 Days campaign that launches today. It highlights how fairly raised revenue and state investments benefit all Minnesotans. Invest in Minnesota, a coalition of faith, labor and nonprofit organizations, believes it's time for Minnesota to raise revenues fairly and invest in prosperity for all, after a decade of deep budget cuts.

    For the next 10 business days, you're going to meet 10 Minnesotans whose lives have been changed because of state investments.

    Robyn Cruey is the first of these.

    Photo smiling womanRobyn is a small business owner and mother of two young children.

    She owns I Heart Kids' Art, an art studio for young children in Minneapolis. "I opened my own business because like so many women who stay home with their kids for a few years, I couldn't find a job when I was ready to return to work," she says.

    Robyn turned to WomenVenture, a nonprofit that assists women to create and build their own businesses.

    "Owning your own business is very daunting and risky," she says. "I couldn’t have done it without WomenVenture’s training, mentoring and skill development programs. WomenVenture also helped me get a small business loan, which enabled me to move into a better space and build my business. WomenVenture couldn't help women entrepreneurs like me without the support of grants from Minnesota's Department of Employment and Economic Development (DEED)."

    Robyn says she's a prime example of the benefits of state investments in small business.

    She started her own business when she couldn't find a job after staying home with her two young children for several years. Robyn says she isn't alone: many mothers cannot find employment when they are ready to return to the workforce.

    "I have a successful business that helps provide for my family, helps kids learn through art, and creates jobs," she says. "As a small business owner, I am happy to pay my fair share in taxes and I think everyone should do the same."

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

    by Christina Wessel | Mar 25, 2013

    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.

  • Minnesota needs to renew investments in higher education

    by Clark Biegler | Mar 19, 2013

    Minnesota has dramatically cut investments in our public universities and colleges in recent years, driving up tuition and undermining the state's ability to produce the well-educated workforce we need to be competitive.

    A new Center on Budget and Policy Priorities report shows that since 2008, state funding for Minnesota's public colleges and universities has dropped by over 30 percent per student when adjusted for inflation, which translates to a $2,600 decrease in state investments per student.

    These cuts in state funding have resulted in large tuition increases, making higher education at public colleges and universities much less affordable. Since the start of the recession, average tuition at four-year public colleges in Minnesota has increased by $1,800, when accounting for inflation, or over 20 percent. This large increase is making higher education more inaccessible for many Minnesota students and leaving many others saddled with higher student loan debts.

    These numbers are especially troubling when national projections indicate that by 2018, 70 percent of jobs in Minnesota will require a post-secondary education. For Minnesota to meet this need, a college education must remain affordable and accessible for the state's students.

    Governor Dayton's budget proposal attempts to reverse some of these trends by investing in higher education: increasing funding for financial aid through the state grant program and freezing tuition for the next two academic years at the University of Minnesota.

    As the pieces of the final budget are formed, the Legislature should also do its part by restoring higher education funding and raising adequate revenues to invest in both our students and the state's economic future.

    You can find the report, Recent Deep State Higher Education Cuts May Harm Students and the Economy for Years to Come, on the Center on Policy and Budget Priorities' website.

  • Governor Dayton's supplemental budget remains committed to tax fairness, investments in our future

    by Nan Madden | Mar 14, 2013

    The days are getting longer and the weather is turning warmer. That's a sign winter is changing into spring. What hasn't changed since January are the critical needs for this legislative session:

    • The need for a more fair tax system. It's still true that in Minnesota, as income grows, the share of income paid in taxes falls.
    • The need to end the cycle of budget deficits. Minnesota still faces significant gaps between public needs and the resources it takes to meet them, despite improvements in the recent February forecast. The state faces a $627 million deficit in the FY 2014-15 biennium. If we account for inflation, we face a $1.5 billion shortfall in FY 2014-15 and a $1.5 billion shortfall in the next biennium.
    • The need to invest in stronger, healthier and more educated communities.

    Governor Dayton's supplemental budget released today seeks to reach those essential goals.

    His supplemental budget still includes critical investments in education - including early childhood education and all-day kindergarten - to close achievement gaps and ensure Minnesota draws on the talents and strengths of all residents. The budget increases funding for financial aid to ensure college remains accessible and our young people don't start their careers hobbled by student loan debt. It still contains proposals for more effective and efficient health and human services and other investments in our future prosperity.

    The supplemental budget includes a small but important number of new investments in the well-being of Minnesota families and building the ladders to the middle class, including:

    • Dedicating resources so that working Minnesotans can continue to access affordable premium-based health insurance through MinnesotaCare.
    • Restoring $500,000 for Family Assets for Independence Minnesota (FAIM), which helps low-income working Minnesotans build assets by matching their savings at a 3:1 ratio and providing financial literacy training.
    • $5 million to address homelessness among youth.
    • $43 million to freeze tuition for undergraduate students at the University of Minnesota for two academic years.
    • $3 million to restore funding for Crime Victim Assistance grants.

    To raise the revenues needed to address the deficit, make the tax system less regressive and make crucial investments, the supplemental budget includes a tax plan that:

    • Creates a new income tax rate of 9.85 percent on taxable income above $250,000 for married filing joint filers, above $200,000 for heads of households and above $150,000 for single filers. Only about two percent of Minnesotans would pay additional income taxes under this proposal. This raises $1.1 billion in FY 2014-15.
    • Makes $18 million in improvements to the Property Tax Refund for Renters (the Renters' Credit), ensuring that these low- and moderate-income Minnesotans don't pay too high a share of their incomes in property taxes. This would provide an average $57 in additional property tax refunds to more than 300,000 Minnesota households, and make up a portion of cuts passed in 2011.
    • Updates Minnesota's Working Family Credit to reflect recent federal changes affecting married couples. The Working Family Credit is a crucial tool for making the state's tax system less regressive. More than 54,000 working families would benefit from this provision.
    • Increases taxes on tobacco products, primarily through a 94-cents-per-pack increase on cigarettes, raising $317 million.
    • Ends some exemptions from the corporate franchise tax, including for foreign royalties and foreign operating corporations. This raises $298 million in FY 2014-15.
    • Raises $10 million from requiring some internet retailers to collect sales taxes from Minnesota residents, just as retailers physically located in the state do.
    • Adjusts minimum fees paid by businesses, which have not been updated since 1990, raising $19 million.
    • Increases Local Government Aid to cities by $80 million and County Program Aid by $40 million in FY 2015.

    Components of the Governor's original tax reform plan that have been removed include:

    • Lowering the state's sales tax rate to 5.5 percent and extending the sales tax to items of clothing that cost more than $100, as well as many services purchased by consumers and businesses.
    • Providing a property tax rebate of up to $500 to all Minnesota homeowners.
    • Reducing the corporate tax rate from 9.8 percent to 8.4 percent.
    • Lowering the state property tax paid by businesses and cabins and slowing the rate of future growth.

    As we hit the halfway point in the session, three critical goals remain: sharing the responsibility for funding public services more equally by making the tax system less regressive, putting the state and its residents on firm financial footing, and investing in the building blocks of shared economic success. The Governor has laid out his plan. Now it's up to the Legislature to pass a budget plan that meets these goals.

    You can find more details in the Supplemental Budget Update prepared by Minnesota Management and Budget and other materials on the Governor's website.

  • This is Minnesota's moment to remain a leader in health care reform

    by Christina Wessel | Mar 11, 2013

    Change is coming. Starting October 1, 2013, more than one million Minnesotans will have the opportunity to enroll in health insurance through a new Exchange. The Exchange, a key element of the federal Affordable Care Act, will be a web-based marketplace where individuals and small businesses can shop for, compare and purchase health insurance.

    This can be a positive change for Minnesotans. We know the current insurance marketplace isn't working well, particularly for individuals and small businesses. One reason is that they lack the buying power of larger employers and are unable to negotiate for better value and higher quality. They struggle to find affordable insurance that meets their health care needs.

    We have the opportunity to create an Exchange that will encourage a better health insurance marketplace for more than a million Minnesotans.

    This week, the Minnesota House and Senate will hash out their differences on Exchange legislation in a conference committee (Senate File 1 and House File 5). Both the House and Senate bring strong positions to the bargaining table, but they differ in at least two important areas.

    An Exchange that looks out for consumers. Minnesota needs an Exchange board with the authority to act in the best interests of consumers, also known as a “smart purchaser” model. Giving the Exchange board the ability to select which plans will be sold in the Exchange creates an incentive for insurance carriers to compete on value and quality, leading to better insurance plan choices for consumers. The alternative - a “clearinghouse” model where all plans that meet a minimum standard must be sold in the Exchange - does not give the Exchange board any ability to improve the current market for consumers.

    Both the House and Senate include a smart purchaser model. However, the House position would potentially allow hundreds of plans to automatically be allowed in the Exchange before the board's smart purchasing authority would kick in. We support the Senate position, which would give the Exchange meaningful authority to seek better value and quality for consumers.

    An Exchange that is wisely funded. It is important that the Exchange be self-supporting, does not compete for resources with other important state priorities, and asks those who benefit most from the Exchange to pay the largest share of the costs. We support withholding a small percentage of each premium sold through the Exchange, known as a "premium withhold," to fund the Exchange. Using a premium withhold would ensure that Exchange revenues automatically increase to cover additional costs as enrollment increases, that it would not compete with other priorities for general fund or Health Care Access Fund resources, and that insurance carriers would pay for a marketplace that is expected to bring $3 billion in revenues to their doorsteps.

    We support the House position, which uses a premium withhold to fund the Exchange. We oppose the Senate position to use tobacco tax revenues from the Health Impact Fee. We also strongly oppose using the Health Care Access Fund to fund the Exchange, since these resources are needed for maintaining affordable health care for working Minnesotans. Although the Health Care Access Fund is not included in either the House or Senate bill, it could be brought in as part of final negotiations.

    This is an important moment for our state. Minnesota prides itself in being a national leader in health care reform, but we could lose that mantle if we don't create an Exchange with the ability to improve the health insurance marketplace for consumers.

    We thank Senator Lourey and Representative Atkins for their leadership and perseverance in moving the Exchange legislation through the Senate and House. Their hard work - along with a near record number of committee hearings, dozens of hours of testimony and countless amendments - have culminated in a conference committee with the opportunity to create an Exchange that Minnesota can be proud of.

  • The why and how of tax reform

    by Nan Madden | Mar 06, 2013

    The time is ripe for Minnesota to reform our outdated tax system to make it fairer, end the cycle of budget deficits and sustainably fund the state's priorities.

    That's the gist of testimony I gave to a recent House Tax Committee hearing on Governor Dayton's tax plan.

    The February 27 hearing drew hundreds of people from throughout Minnesota, many of whom echoed this call for fairness as they talked about the real difference it makes when we invest in schools, housing, services for people with disabilities, youth mentoring, and police and firefighting.

    Here's a summary of what I told the committee:

    Tax reform is well overdue in Minnesota because of two major problems with the current tax system:

    1. It doesn't raise enough revenue to meet the state's needs, contributing to a cycle of frequent budget deficits.
    2. It asks low- and moderate-income Minnesotans to carry too much of the responsibility for funding public services. The wealthiest one percent of Minnesotans pay 9.7 percent of their incomes in total state and local taxes, significantly less than the 12.1 percent that middle-income households pay.

    We call on policymakers to pass tax reform that narrows that gap, ends the cycle of budget deficits without painful and destructive cuts, and responsibly invests in the building blocks of our future success.

    We thank Governor Dayton for releasing a budget and tax plan that seeks to reach those goals.

    As you put together your tax bill, you may not take all the tax policy ideas the governor has put forth. But it's crucial that you raise enough revenues to meet those goals.

    A part of Governor Dayton's tax plan that we urge you to include in your tax bill is a new income tax bracket. The 4th tier is an essential step so that the highest-income Minnesotans pay a similar share of their incomes in state and local taxes as other Minnesotans do, and is critical to a tax plan that is progressive overall. The experience of other states with similar policies find they have little impact on the number of wealthy individuals in their state. It will not affect most small businesses.

    A comprehensive tax reform plan will likely include some increases in regressive taxes. The progressive pieces of a tax plan must be large enough to offset increases in regressive taxes. And we should use tools such as targeted tax credits to offset some of the tax increases on low- and moderate-income Minnesotans.

    Reducing reliance on the property tax is a high priority in the Governor's tax plan. Property tax increases reach Minnesotans whether they own or rent their homes. We  urge you to include improvements to the Property Tax Refund for Renters in your tax bill this year.

    We call on policymakers to seize this moment, and reform our tax system so that:

    • We no longer ask low- and middle-income Minnesotans to shoulder more than their share of the responsibility; and
    • We can make the investments in the high-quality workforce, strong infrastructure, safe and vibrant communities, and the ladders to the middle class that are the keys to our future success.

    We look forward to more conversations with Minnesotans as we shape a tax system that is more fair and responsibly invests in our future.

  • Governor Dayton's budget proposal part 5: Health and human services

    by Christina Wessel | Mar 04, 2013

    Many Minnesotans have seen the value of public health and human services at some point in their lives, whether it's child care assistance that enabled a friend to keep her job, nursing home care for an elderly parent, or affordable health insurance for a cousin with a chronic illness. These and other essential services improve the health and stability of Minnesota families throughout the state.

    Governor Dayton's budget proposal increases funding for health and human services by $128 million over forecasted spending for the FY 2014-15 biennium (or an eight percent increase from FY 2012-13). Despite the wide scope of this area of the state budget, the Governor manages to stretch limited dollars pretty far. The initiatives in his budget will improve the lives of thousands of Minnesotans and help the state provide services more efficiently.

    Health care. Around 145,000 currently uninsured low-income Minnesotans will have affordable and comprehensive health insurance as a result of expanding eligibility for Medical Assistance and making it easier for people to enroll. Governor Dayton recently signed a bill taking the first step to expand eligibility for parents, young adults and adults without children. Other Medicaid-related improvements are expected later in the session.

    The Governor's budget also sets aside $300 million in state resources for improving MinnesotaCare to meet requirements in the Affordable Care Act. For the past 20 years, MinnesotaCare has enabled hundreds of thousands of low-income working Minnesotans to purchase affordable health insurance for themselves and their families. The Dayton administration is working with the federal government to ensure federal funding continues to be available to create the next generation of MinnesotaCare.

    In order to meet the need for more trained health care professionals, the Governor proposes increasing funding for Medical Education Research Costs (MERC) by $13 million in the FY 2014-15 biennium to provide grants to health care providers who train medical students.

    Mental health. The Governor's proposal will allow thousands of children to access better mental health care by investing in more school-linked mental health services, improving the coordination of care for children with complex conditions and helping family members learn skills so they can support their child's treatment. The Governor also invests in mental health services for all ages by funding additional mobile mental health teams to respond to crises, helping individuals with mental health issues to transition from institutional care back into the community, and improving access to mental health services by increasing some provider reimbursement rates and expanding the range of services covered.

    Reform 2020. The Governor's budget implements elements of the Reform 2020 plan, which restructures services for the elderly and Minnesotans with disabilities to ensure people get the "right services at the right time." Some of the Governor's changes include helping individuals receive care in their homes rather than in institutions, providing more intensive services for children with autism who are enrolled in Medical Assistance, and supporting housing stability for people with chronic conditions.

    Minnesota Family Investment Program (MFIP). In order to address intergenerational poverty, the Governor proposes start-up funding for a home visiting initiative to help improve graduation rates among teen parents and ensure the healthy development of their children. The Governor also proposes to change how income is counted when determining eligibility for MFIP in order to reward parents who are working toward self-sufficiency.

    Minnesota's human services IT infrastructure. We may be living in the 21st century, but many of the IT systems that support the state's human services are severely outdated. The Governor's budget updates Minnesota's human services technology infrastructure to deliver services more efficiently and improve the user experience to reflect our modern world.

    Buying in bulk. The State of Minnesota has enormous potential bargaining power in negotiating for better prices. The Governor's budget takes advantage of this, finding approximately $66 million in savings through strategies like aggressively contracting with managed care organizations and negotiating for higher rebates for diabetic test strips.

    Governor Dayton faced difficult choices when developing the health and human services portion of his budget. After years of budget deficits, many Minnesotans expected him to restore funding for essential services that had suffered cuts year after year.

    Unfortunately, the need continues to outpace the available resources. For example, although the Governor's budget proposes permanent funding for Emergency Medical Assistance to provide cancer and dialysis treatment for qualifying non-citizens, it is just a small step in rebuilding an adequate health care safety net.

    All in all,  the Governor's plan makes a good start on re-investing in our future.

  • Forecast shows small improvement, but need to sustainably fund our priorities remains

    by Christina Wessel | Feb 28, 2013

    This morning's release of the February 2013 Economic Forecast means legislators can begin in earnest the challenge of setting a budget for the FY 2014-15 biennium. The good news from the forecast is that Minnesota's economy is moving in a positive direction. However, the state continues to face structural deficits, meaning we haven't found a sustainable way to meet the state's needs and make investments that are critical for our future economic success.

    More good news for the FY 2012-13 biennium. There is a $295 million positive balance for the current biennium, FY 2012-13. Of that, $290 million must be used to continue to buy back the school payment shift, bringing the total amount that has been repaid to schools to $1.9 billion, with $801 million left. The remaining $5 million of the positive balance will go into the state's budget reserve, bringing the balance to $649 million.

    Next biennium improves, but deficit remains. The November forecast predicted a $1.1 billion deficit for the FY 2014-15 biennium. Thanks to a combination of improved revenues and lower-than-anticipated spending, that deficit has been reduced to $627 million. This still leaves policymakers with the challenge of addressing the deficit without cutting vital services and undermining future economic growth.

    After considering inflation, structural deficit continues in FY 2016-17. Although the economic improvements we see in the near future are expected to carry over into FY 2016-17, the state is still anticipating a nearly $1.5 billion deficit after including the impact of inflation.

    There is always some level of uncertainty inherent in developing a forecast. In recent years, that task has become even more challenging due to unprecedented economic and political conditions. This forecast takes a cautious road, presuming that Minnesota would experience a "modest shock" from federal sequestration, but expecting Congress to eventually agree to a more targeted deficit-reduction plan. There is a 20 percent chance of sequestration cuts continuing the whole year and slowing economic growth, but still no strong risk of a recession.

    We can all breathe a little sigh of relief that Minnesota's economy is looking better, leading to an overall improvement in the state's fiscal picture. But this is an important moment for policymakers. As we recognized yesterday, the Governor's budget focuses on the goals of raising revenues fairly - ending the cycle of deficits, gimmicks and deep cuts - and recognizes the importance of securing future economic growth by investing in stronger, healthier and more educated communities. The Legislature should also pursue these goals as they begin to assemble their budget proposals.

    During a press conference, Governor Dayton announced that he will release his supplemental budget during the week of March 11, which will include an increase in the property tax credit for low-income renters - a decision we strongly applaud.

  • You can't turn a ship on a dime, but you can start to get it back on course

    by Christina Wessel | Feb 27, 2013

    I sometimes think of the State of Minnesota as a ship that's been heading in the wrong direction. We've spent the last few weeks reviewing elements of Governor Dayton's proposed budget, which includes many ideas that will start to turn Minnesota around and get us back on the right course. His budget also reflects the reality that you can't turn a ship on a dime.

    Governor Dayton's budget embraces many of the goals we've championed, including a fair and adequate tax system, sustainable budget decisions that end the cycle of deficits, and investments that will prepare Minnesota's economy for the future:

    Raise revenues fairly. At the Minnesota Budget Project, we have been calling for a balanced approach to addressing the state's budget challenges for more than a decade. We are pleased that Governor Dayton has shown the leadership to take on the critical task of reforming our tax system, and that his tax package has the goals of increasing fairness in Minnesota's tax system and putting Minnesota on firmer financial footing.

    End the cycle of gimmicks. The Governor's proposal balances the state's budget without gimmicks, something we haven't seen in a long time. There are no big shifts from other accounts, no directives for agencies to find magic savings, no delaying payments (or speeding them up), no tobacco bonds, no tapping our budget reserves. And Governor Dayton's proposal balances the budget not only for FY 2014-15, but also for the FY 2016-17 biennium.

    Invest in our future economic success. A number of important investments in the Governor's budget will set up our economy for future growth where the benefits will be broadly shared. For example, his budget starts to turn the ship by investing in early childhood opportunities so children start off on the right foot, increasing funding for financial aid so more students can afford to go to college and start their careers free of crippling student loan debt, and improving access to affordable health insurance so people can get the care they need.

    There is so much more to be done. Although there were many positives in the Governor's proposal, some have noticed what is missing from the budget. After years of spending cuts, many were hoping that other critical services - like preventing homelessness, building affordable housing or helping low-income families build assets - would see investments that would help to address the very real needs Minnesota families are facing in a challenging economic time.

    We know the Governor's budget proposal is just round one in the budget discussions, and we'll start to see the Legislature's ideas emerging after the February Forecast is released. But one thing to keep in mind as the discussions go on: we must raise the amount of revenues raised in the Governor's budget, or we will turn back to the old formula of deep spending cuts and gimmicks... and Minnesota will keep moving in the wrong direction with the same unfair tax system.

  • Governor Dayton's budget proposal part 4: Economic development, housing, assistance for low-income Minnesotans, veterans

    by Clark Biegler | Feb 18, 2013

    Governor Dayton's budget seeks to put the brakes on more than a decade of budget deficits, gimmicks and deep cuts to services, and instead create a fairer tax system that invests in our future. We've talked about some of his plans to reach those goals in earlier blog posts, like health care reform, education and tax reform.

    The Governor's budget also contains other important proposals that are intended to invest in our future prosperity, including:

    Economic development. Governor Dayton's budget proposes substantial investments in loans and grants to Minnesota businesses to encourage economic development and job creation. His budget includes a total of $55 million for the Minnesota Investment Fund and the new Minnesota Job Creation Fund in the FY 2014-15 biennium. These funds will be directed to local governments and businesses that meet certain criteria for investment, with the goal of creating 12,500 to 15,000 new jobs in the state. Additionally, the Governor proposes $20 million from the state's general fund to accelerate transportation projects that are intended to improve Minnesota's economic competitiveness.

    Housing. The Governor's budget proposes one-time funding to address housing needs in the state. His plan includes $10 million for employers to meet gaps in affordable housing for workers, $2 million for rental assistance to stabilize housing for children whose families move frequently, and $1 million in rental assistance for ex-offenders reintegrating into the workforce.

    Assistance for low-income Minnesotans. The Governor increases funding for Civil Legal Services by $500,000 a year to help low-income families facing legal issues related to eviction, foreclosure, domestic violence or other civil matters. Additionally, the Governor increases funding by $200,000 a year for taxpayer assistance grants to nonprofits that provide free tax preparation for Minnesotans who are low-income, elderly, disabled or limited English-speakers.

    Veterans. The Governor's budget increases funding to allow more veterans to qualify for education and training benefits and to help veterans access other services. Minnesota will also continue to recognize the service of veterans through a new cemetery in southeastern Minnesota, as well as permanent funding for Honor Guard services at military funerals.

    The Governor's budget proposals are a step in the right direction toward funding investments in the state's economic success and Minnesotans recovering from hard times after years of deep cuts.

  • A happy Valentine's Day for health care reform

    by Christina Wessel | Feb 14, 2013

    More than 87,000 Minnesotans will have access to affordable and meaningful health insurance beginning in 2014, including 34,000 who currently have no insurance. That's thanks to legislation to expand eligibility for Medicaid, known as Medical Assistance in Minnesota. House File 9 has passed both bodies of the Legislature and Governor Dayton is expected to sign the bill into law.

    The legislation has three key provisions:

    • Covering adults without minor children with incomes up to 138 percent of the federal poverty line ($15,856 for an individual or $21,404 for a couple).
    • Covering parents and young adults (19- and 20-year-olds) with incomes up to 138 percent of the federal poverty line.
    • Removing asset limitations for nearly all individuals eligible for Medicaid.

    Minnesota policymakers have shown strong leadership by acting early in the 2013 Legislative Session to pass legislation taking advantage of the opportunity to cover more Minnesotans with meaningful health care insurance. That's good news for the 87,000 Minnesotans who will have improved access to health care, but also saves the state $129 million in the FY 2014-15 biennium, because the federal government will pick up 100 percent of the cost for all of those who are newly eligible for Medicaid.

    This is also good news for health care providers - more people with health insurance means there will be fewer unpaid medical bills. And more people paying their bills will help reduce costs for everyone.

    But there is still more to come. Other provisions to improve access to health care through Medicaid will be coming later in the session, most likely in the Health and Human Services omnibus finance bill. These include:

    • Covering children and pregnant women with incomes up to 275 percent of the federal poverty line ($53,708 for a family of three).
    • Streamlining enrollment for Medicaid, including creating an online application process, allowing real-time eligibility determinations and eliminating six-month renewals.

    We thank Governor Dayton, and bill authors Representative Huntley and Senator Sheran for making sure Minnesota takes advantage of this important opportunity.

  • Governor Dayton's budget proposal part 3: Education

    by Clark Biegler | Feb 05, 2013
    An educated Minnesota is critical for the state's economic success. Governor Dayton's FY 2014-15 budget proposal demonstrates his vision for education in Minnesota as he invests nearly $600 million in additional resources for E-12 and higher education. 

    E-12 education. One of the Governor's most significant proposals simplifies the primary funding stream for school districts and increases funding by $52 per pupil, a total increase of $118 million in FY 2014-15. 

    Under the Governor's budget, $1.3 billion will be used in FY 2016-17 to reverse the remaining shifts in education funding. Under current law, any positive balance must be used to repay the school funding shifts used in recent years to balance the budget in the short term. The $1.3 billion positive balance for FY 2013-14 in the November 2012 Economic Forecast is also being used to repay the shift. 

    Special education. The Governor's budget replaces the current special education formula with a new one in FY 2015 that will allocate funds to districts with the most need and boost overall funding by 13 percent in FY 2014-15. 

    Reducing educational disparities. Minnesota has one of the nation's worst achievement gaps between its white students and its students of color. The Governor's budget includes proposals for all children to have the opportunities to reach their full potential:
    • Funding for optional all-day kindergarten so more children are prepared to start school. This funding is expected to increase participation in free all-day kindergarten programs to 85 percent in FY 2015, up from only 49 percent in FY 2012.
    • Increased funding for districts with English language learner students from five to seven years to give these students a better chance to compete academically with native English speakers.
    Early education. Children can get a head start on a successful school career if they have quality early childhood education. The Governor recognizes this by investing in access to early education for low-income families.
    • An additional $44 million in FY 2014-15 for the Early Learning Scholarship program, which provides scholarships for high-needs children ages three to five to participate in early learning opportunities including high-quality child care and early childhood programs.
    • Increased funding to improve reimbursement rates to high-quality child care providers, improving access to this opportunity for more than 2,000 children.
    Unfortunately, the Governor's budget does not include additional funds to help the more than 6,000 working families currently on the waiting list for child care assistance. 

    Higher education. The Governor increases funding by $80 million over the biennium for financial aid through the state grant program. Grants will increase by up to $1,400 to more accurately reflect higher education costs, with about 5,000 additional students becoming eligible for financial aid, in part due to adjustments to expected contribution amounts. 

    The Governor also enhances funding for an American Indian scholarship program to enable the 500 college students currently on the waiting list to receive up to $4,000 in financial aid for undergraduate students and $6,000 for graduate students. 

    MnSCU. The Governor increases investments in the Minnesota State Colleges and Universities system with more support for various skill-building programs and retaining high-quality faculty and staff, a total increase of $80 million in FY 2014-15. 

    University of Minnesota. The Governor sets aside $80 million in additional funds for the University of Minnesota pending a review of its administrative budget increases. He will make a final decision on these funds after the February economic forecast comes out. 

    Even with these investments in higher education, state funding remains barely above levels from 12 years ago - and with no increases to respond to inflation or the enrollment growth of more than 38,000 students from 2002 to 2011. 

    The Governor's education proposals represent important steps toward investing in Minnesota's future. Increasing access to educational opportunities for all Minnesotans should be a high priority for the state. 

    -Clark Biegler
  • Governor Dayton’s budget proposal part 2: Tax reform

    by Nan Madden | Jan 31, 2013

    After many years of budget deficits and deep cuts to services, it's time to instead invest in our communities and our future. We've long argued for a tax system that more adequately funds our state's priorities and is based more on the ability to pay.

    In his recent budget proposal, Governor Dayton outlines how he thinks Minnesota should achieve those goals. Overall, his tax reform plan raises $2.0 billion that is used to address the state's $1.1 billion budget shortfall (which rises to $2.0 billion when we account for inflation), and to make new investments, particularly in education (early childhood, K-12 and higher education), economic development and public safety.

    The Governor's tax reform plan includes a number of primary components:

    • It creates a new income tax rate of 9.85 percent on taxable income above $250,000 for married filing joint filers, taxable income above $200,000 for heads of households, and taxable income above $150,000 for single filers. Only the 2.1 percent of Minnesotans with the highest incomes would pay any additional income tax under this proposal. The plan raises $1.1 billion in the FY 2014-15 biennium.
    • It lowers the state's 6.875 percent sales tax rate to 5.5 percent, and extends the sales tax to items of clothing that cost more than $100, digital goods, and many services purchased by consumers and businesses. The sales tax overhaul raises $2.1 billion in FY 2014-15. The administration estimates that, for consumer purchases, the rate reduction offsets the expansion of the sales tax to more items.
    • It provides a property tax rebate of up to $500 to all Minnesota homeowners, for a total of $1.4 billion in FY 2014-15. Homeowners would apply for the rebate when they file their income taxes in 2014.
    • It lowers the state's corporate income tax rate from 9.8 percent to 8.4 percent, and ends some current exemptions, including for foreign royalties and foreign operating corporations. Taken together, these efforts to broaden the base and lower the rate are close to "revenue neutral," raising $4.1 million in FY 2014-15.
    • It lowers the state property tax paid by businesses and cabins by $25 million in FY 2014-15 by preventing the levy from growing with inflation for two years. It also slows the rate of growth starting with taxes paid in 2016.
    • It increases Local Government Aid to cities by $80 million in FY 2015 and raises County Program Aid by $40 million in FY 2015.
    • And it raises taxes on tobacco products, primarily through an increase of 94 cents a pack on cigarettes. This proposal raises $319 million, but seeks to reduce state health care costs in the long term by discouraging tobacco use.

    In Minnesota, the highest-income Minnesotans pay a smaller share of their incomes in state and local taxes than middle-income Minnesotans. The Governor's tax reform plan seeks to close that gap, to make the tax system more fair while also putting the state on a firmer financial footing.

  • Governor Dayton's budget proposal Part 1: Health care reform

    by Christina Wessel | Jan 23, 2013

    The state budget plan released by Gov. Mark Dayton yesterday seeks to end the cycle of deficits and put the state on a firmer financial foundation.

    We're just starting to dig into the details of the budget and will talk about taxes and other issues in future blog posts. Today, we'll focus on health care reform.

    Governor Dayton’s budget preserves affordable health care for low- and moderate-income Minnesotans through two proposals.

    For low-income working Minnesotans, the budget takes advantage of the opportunity to help 145,000 currently uninsured Minnesotans get affordable and comprehensive health insurance by expanding eligibility for Medicaid for children and pregnant women with incomes of up to 275 percent of federal poverty guidelines, and for most other adults with incomes of up to 138 percent of federal poverty guidelines.

    The proposal also recommends a number of reforms to comply with the federal Affordable Care Act and remove barriers to enrollment.

    This will result in net savings for the state of $117 million in the FY 2014-15 biennium, because federal funds will cover a significant portion of the cost.

    The Governor also seeks to preserve MinnesotaCare, a signature health care program that helps hundreds of thousands of working families access affordable health insurance.

    MinnesotaCare is in jeopardy due to changes resulting from federal health care reform. The Governor’s budget directs the Department of Human Services to negotiate with the federal government to preserve "seamless coverage" for individuals and their families as their income increases above 138 percent of the federal poverty guidelines.

    Both of these actions are essential to preserve – and improve – the health insurance options available for low- and moderate-income families that allow Minnesota to enjoy one of the lowest uninsurance rates in the nation.

    The Dayton Administration deserves thanks for their leadership on making these two issues a priority.

    Watch for our upcoming blogs on the Governor's budget proposal. In the meantime, you can check out links to the Governor's plan.

  • Our top three list for the 2013 Legislative Session

    by Nan Madden | Jan 08, 2013

    The 2013 Minnesota Legislature faces some of the most critical issues in generations when it meets for the first time today. Minnesota faces a $1.1 billion shortfall in FY 2014-15 ($2.0 billion when inflation is included) and is suffering from years of deficits, budget gimmicks and quick fixes.

    Minnesota's tax system no longer meets the state's needs. It is not raising enough revenue to fund the state's priorities, and it asks low- and moderate-income Minnesotans to carry too much of the responsibility for funding state and local services.

    Policymakers have an opportunity to make responsible budget and tax choices that end the cycle of deficits and gimmicks, and get us on the path to making public investments important to our quality of life and that ensure all Minnesotans have the opportunity to succeed.

    The Minnesota Budget Project's top three priorities for the 2013 Legislative Session are:

    1. Pass a responsible budget that sustainably funds the state's priorities and does not rely on gimmicks and quick fixes. (Policymakers should also require that inflation be included in future economic forecasts to ensure transparency and accountability in budget decisions.)
    2. Reform our tax system so that it adequately funds Minnesota's priorities and is more fair. An increase in the state's income tax based on the ability to pay will share the responsibility for raising revenue more fairly. To the extent that tax reform increases taxes not based on the ability to pay, it should include policies like tax credits to offset increases on low- and moderate-income Minnesotans.
    3. Increase access to health care for more Minnesotans through health care reform. More than 140,000 low-income children and their parents, seniors, and people with disabilities could gain access to affordable health insurance if policymakers expand Medicaid. They should also preserve MinnesotaCare's legacy of making affordable health care coverage available to low-income working families by creating a Basic Health Plan. And policymakers must create a state-based health insurance exchange that effectively negotiates on behalf of Minnesotans and creates opportunities for future reform efforts.

    Policymakers can make a fundamental difference in our state's future if they adopt our priorities and invest in our people, our communities and our future.