Republicans in the Minnesota House passed a budget bill Wednesday that would cut spending on state government operations by 34 percent over the next two years.
The bill -- which passed on a 72-61 party line vote -- would reduce the state workforce by 15 percent, freeze wages, consolidate services and outsource more state work to private companies.
With the state facing a projected $5 billion budget deficit, GOP leaders say it's time for government to modernize and innovate. Rep. Morrie Lanning, R-Moorhead, chair of the state government finance committee, said his $602 million bill is a big step toward those goals.
"We knew going in that we just can't be about the business of reducing our expenditures. We need to come up with reform proposals that will help us get our budget in control going forward in the future," said Lanning. "I believe that this bill has more government reform proposals than we've probably seen in any other bill in a long time."
Lanning's reform list includes a 15 percent reduction in the state workforce by 2015, consolidation of all information technology departments into one agency, creation of a commission to identify unneeded state activities and an audit of how the state spends money on supplies and outside services.
Rep. Keith Downey, R-Edina, said the state needs to fund its priorities, not its bureaucracy.
"I think everybody in Minnesota would agree that just getting better in our back office functions, and managing our state executive branch agencies more effectively is absolutely the right thing to do. And if we do that well, we'll have money to fund our priorities," said Downey.
But Democrats argued that Republicans don't have the financial documentation to back up their claims of big savings. For example, DFLers point to $133 million in savings that GOP legislators expect from the implementation of new tax analytic software.
House Minority Leader Paul Thissen of Minneapolis said the Department of Revenue could not verify that estimate.
"If you were a private business and you were going to say 'OK, we're going to get this revenue in the future, and so we're going to spend money now on the bet that we're going to get that money in the future,' you would be fired almost immediately," said Thissen. "But that is exactly what you're doing in this bill, because you're betting on the come that you're going to have money that you're spending in this bill."
Democrats also blasted the bill for taking aim at public workers with wage freezes and workforce cuts. Rep. Ryan Winkler, DFL-Golden Valley, said the bill is disrespectful to state employees and the collective bargaining process.
"Government jobs are real jobs. As long as public workers are performing a valuable service, they're doing a good job," said Winkler. "If you don't think they're performing a valuable service, address that. Don't blame them for the conditions under which we've created for them to work."
But Republicans defended the move. Rep. Lanning said, given the deficit, the state has to hold down wages.
"If we allowed negotiations to go on and negotiations resulted in increased compensation -- but this Legislature doesn't have the money to increase compensation -- what kind of respect are we showing collective bargaining at that point?" Lanning asked.
The Dayton administration also raised concerns about the House bill. Commissioners of four state departments sent letters to Lanning warning that the proposed spending cuts would reduce staff and core services.
Earlier this week, the Senate passed a similar state government budget bill. Its version would save additional money by moving state employees to a new health insurance plan with high deductibles, health savings accounts and higher out-of-pocket costs.