Obama's budget offers mixed results for Minnesota
The $3.8-trillion federal budget proposed by President Barack Obama this week holds some promises, and some worries, for Minnesota.
The numbers look pretty good for many parts of Minnesota's economy, but the budget includes some cuts that could be felt locally.
On its web page, the federal Office of Management and Budget says the new budget would invest more than $800 million in the state's roads, highways, and airports.
That's very close to levels the state was used to before to last year's economic recovery windfall, and there may even be some new money.
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One proposed new transportation program would focus transit efforts on low-income people. The Minnesota Department of Transportation's Abby McKenzie said it's a competitive grant program.
"This is a new initiative by this administration, certainly a focus of our commissioner [Thomas Sorel], too," she said. "He talks about liveability a lot, so we're very interested."
McKenzie said it's too early to speculate on what Minnesota projects might fit the criteria.
The Army Corps of Engineers would get a little more than last year for restoration work on the Upper Mississippi River, and a lot more for flood control planning in the Fargo-Moorhead area. Last year, flood planning in the region got less than $1 million. This year, according to the Army Corps' Peter Verstegen, several feasibility studies could get $16 million.
"As our project manager has said, there's a lot of work to do in a very short period of time, and they're moving things along as fast as they can for the Fargo-Moorhead study and all the groups within that $16 million," Verstegen said.
The proposed budget outlines cuts, as well.
Money for cleaning up the Great Lakes would be cut, but advocates aren't complaining too much. They're happy that they aren't losing more.
Last year the government started a major investment in restoring water quality, with $475 million. Next year, the Great Lakes would only get $300 million.
Jeff Skelding from the Healing Our Waters Great Lakes Coalition said Obama is not abandoning his promise.
"If you combine last year's amount with this year's amount, and compare that to any time period you'd like to in previous Great Lakes funding, you're going to see a trajectory that is very steep, going in the right direction," Skelding said.
Obama is proposing to eliminate a water treatment program that's helped poor communities in northeastern Minnesota and northwestern Wisconsin. The program is a Congressional earmark and the administration says it's duplicating other programs.
In the last 10 years or so, this earmark has invested about $25 million in 8th District Rep. James Oberstar's district. In total, the program was authorized for $129 million. Obama wants to eliminate it.
As expected, the president zeroed out funding for nuclear storage planning at Yucca Mountain. That would seem to underline the questions marks already hanging over the temporary waste storage at Minnesota's two nuclear power plants, but the National Nuclear Institute's Steven Kraft said the industry will carry on.
"We store the material very safely and securely," he said. "We think we should recycle the material at some point, and then you need disposal. You don't need disposal right away."
Kraft said a blue-ribbon panel to recommend solutions for storing nuclear waste should begin meeting soon.
Minnesota Finance Commissioner Tom Hanson said he's wary of paying too much attention to Obama's proposals. For one thing, Congress will likely take months to act.
"They have a mammoth deficit and some of this may be cut back, so there's a little bit of a risk in depending too much on this," Hanson said.
Congress has the ultimate control of the purse, and Hanson doesn't expect Congress will make any budget decisions until well into summer, or even fall.
Various sectors of the Minnesota economy see a mixed bag in the proposed federal budget. Approximately $21 million, a 28 percent increase, is outlined for restoration work along the Upper Mississippi River.
Also in the budget is a change in commodity payments to farmers. The administration says it would target payments to lower-income farmers.
Under the Obama proposals, wealthy people would lose their Bush-era tax cuts, but small business owners could choose from a smorgasbord of tax breaks.
Money remaining in the stimulus program could expand broadband service into small towns, and the stimulus could also extend a temporary boost in federal dollars to match state Medicaid funding.
Hanson said the only thing that would help the state address its own deficit is if the federal government were to transfer significant money into the state's general fund.
Even then, Hanson said he's afraid any such boost could just disappear again as the federal government moves into a leaner mode.
