Dayton, state lawmakers want credit for budget surplus

Budget deal reached
House Speaker Kurt Zellers discusses a budget deal at the Capitol in St. Paul, Minn. Thursday, July 14, 2011.
MPR Photo/Jeffrey Thompson

Gov. Mark Dayton and state lawmakers are headed into the 2012 legislative session with a budget surplus, news that has a lot of elected and appointed officials taking credit for the state's return to the black.

But much of the $876 million surplus has little to do with the actions taken in the past year. Instead, state budget officials credit accounting changes and unexpected revenues from the federal government.

Still, that hasn't stopped lawmakers and state officials who closed a $5 billion budget hole in July from undertaking a little cheerleading.

After a budget standoff that shut down the state government, Dayton and GOP legislative leaders enacted a budget plan to resolve their differences. Now, they are taking credit for the good budget news.

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"Now we can have some legitimate proof to say here's what happens when you reform government," Republican House Speaker Kurt Zellers said. "You can save some costs. You can reduce some of the burden on the private sector, but you can also reform the way government works. That's how we're going to lead the recovery."

Zellers isn't the only one. Many Republican lawmakers sent emails to their constituents hailing the news. Some said their efforts to hold the line on taxes and government spending worked. Others said the surplus was a direct result of the budget actions taken in July.

Gov. Mark Dayton
Gov. Mark Dayton addresses the media at the State Capitol in St. Paul, Minn. on Thursday, Dec. 1, 2011. Dayton and lawmakers learned Thursday that the state is projected to be running an unexpected $876 million surplus.
MPR Photo/Tim Pugmire

There's just one problem: state Management and Budget Commissioner Jim Schowalter said there's no proof of that.

"The changes that were enacted in July really are incorporated in the forecast, but they are not driving factors in the improvement in this forecast," he said.

Schowalter said the forecast relied on estimates of what might happen based on the budget deal. But he said the forecast is just that -- a forecast.

"Sometimes our forecasts are a little bit high. Sometimes they are a little bit low," he said. "It's not just a matter of estimating error but there are other things in the future that we don't always know about."

Much of the money in the projected surplus is due to factors other than the July budget deal. For example, nearly half -- $395 million - is due to changes in accounting and unexpected revenues from the federal government. State Department of Human Services officials say about 9,000 fewer people enrolled in a state subsidized health insurance program than were expected to. The federal government also gave the state an additional $101 million that hadn't been factored into earlier estimates.

Republicans in the Legislature aren't the only ones taking credit for the surplus.

State Human Services Commissioner Lucinda Jesson, a member of Dayton's administration, said the department saved money by better management of programs for the elderly. Jesson said state and county workers also are making better decisions when it comes to providing services to sick and disabled people.

"We believe that we're doing a better job assessing people and serving them at the right level of care and sometimes a lower level of care," she said. "That's our policy experts' opinions. We have been working hard to move in that direction."

Jesson said the programs continue to serve the same number of people.

But Patti Cullen, president and CEO of the long-term care trade group CareProviders of Minnesota, said service has been cut back. She also said some assisted living facilities are scaling back the number of low income residents they care for because of state cuts.

"There were significant reductions that were made to home and community-based services in 2009, 2010 and the beginning of 2011," Cullen said. "I think they're just now seeing the results of those changes. I hear the anecdotal pieces of information about people who are no longer able to access programs like the elderly waiver program because the rates are so artificially low."

Cullen said she's pleased the state is running a surplus because she thinks any additional cuts would have come to health and human services programs. She said her biggest worry is that the next forecast in February will show another deficit. That's the forecast the governor and Legislature will actually use to make any changes to the budget.