Budget deal rests on health and human services spending

With 10 days left in the 2015 session, Gov. Mark Dayton, House Republicans and Senate Democrats have some major differences to resolve.

After more closed-door meetings Thursday to try to reach a compromise on a new two-year state budget, they remain far apart in their approaches to many big spending areas, especially health and human services, House Speaker Kurt Daudt said.

"That's really where we are probably the furthest apart," Daudt said after he and other Republican leaders emerged from a breakfast meeting at the governor's residence. "Of course, our concerns are with MinnesotaCare, and the fact that Democrats really aren't putting forth a plan that looks out beyond two years.

"We don't think it's responsible, knowing that the funding source for that program basically is sunsetting in 2019, and there's no plan to continue that."

House Republicans are proposing an elimination of MinnesotaCare, the state-subsidized health care program for the working poor that is funded by a tax on hospitals and health care providers. They want to move those people to coverage through the MNsure health insurance exchange.

They also want sharp cuts throughout the state's health and human services budget. The reductions, which total more than $1 billion, would help fund the House GOP's $2 billion package of tax cuts.

A spokesperson for Dayton said the governor expressed "considerable concerns" during the meeting about the Republican plan for health and human services.

Senate Majority Leader Tom Bakk, DFL-Cook shares those concerns. The Senate is proposing a $341 million increase in health and human services spending. The governor is at roughly the same level.

"That's probably the biggest divide, right? We're about $1.4 billion apart there," said Bakk. "The Senate has been pretty clear in the negotiations that we're not going to dismantle MinnesotaCare. Until we resolve that, and they agree that's not going to happen, it's pretty hard to get to first base with that bill."

Despite that fundamental disagreement, House and Senate negotiators have started holding conference committee discussions about the competing health and human service bills.

State Rep. Matt Dean, R-Dellwood, chair of the House Health and Human Services Finance Committee, said the bills reflect different priorities. The House wants to end what Dean calls wasteful spending.

"Minnesota spends a great deal relative to other states on our public programs, both state and federal dollars," he said. "We are ranked dead last in terms of our accountability over waste of those dollars. Other states have saved hundreds of millions of dollars, and we think Minnesota should too."

State Sen. Tony Lourey, DFL-Kerrick, chair of the Senate Health and Human Services Committee, said the claim of House Republicans that they can save $300 million by cracking down on waste is "questionable at best." Still, Lourey said the conference committee will discuss those proposals.

"These are issues that they haven't really been questioned about and given meaningful answers about," said Lourey. "Where did you come up with these numbers? How do they work? Try to explain them to us. At this point, I don't think they'll be acceptable. But I do need to have an open mind and give them an opportunity to explain them."

A long list of health care advocacy organizations contend both the House and Senate bills fall short of meeting the state's needs. Steve Larson, senior policy director of The ARC Minnesota, a group that aims to protect the rights of people with developmental disabilities, said lawmakers need to spend a lot more.

"We're greatly worried about the outcome. If they fall somewhere in the middle, that means cuts for a wide variety of programs across the board," Larson said. "Because somewhere in the middle is lower than even what the governor is asking, and that's not adequate as far as we're concerned."

Larson said he and other health care advocates will be at the Capitol sharing their concerns with lawmakers during the final 10 days of the session.