GOP lawmakers eye state agency cuts to fund tax relief

Minnesota Republican lawmakers see an opening this session to make deep reductions in state agency budgets and use the savings to pay for a long list of tax cuts.

Despite a $1.4 billion state surplus, some GOP House and Senate members are interested in pulling back the reins on agency spending. Tying that to tax relief could make it more enticing, but union leaders warn it would put thousands of Minnesotans needlessly out of work.

Republicans, though, say it's about setting funding priorities for each department.

"We want to make sure that when we're funding them for things that are necessary, that we fund first of all the most important duties of their office," said Senate State Government Finance and Policy and Elections Committee Chair Mary Kiffmeyer, R-Big Lake.

She and House State Government Finance Committee Chair Sarah Anderson, R- Plymouth, sent a letter to commissioners before the session began asking them to identify spending reductions of up to 10 percent of their budgets.

The financing of government operations, including employee salaries and benefits, represents just over 3 percent of general fund spending. Other committees deal with the bigger pieces, including school funding, health care and human services safety net programs.

Anderson, though, said the requested operational budget exercise for commissioners is similar to what families and businesses do all the time. The discussion of potential reductions does not necessarily mean that cuts are coming, she added.

"I think it's odd that really on a state government level, all we do is look at the increases in new programs," she said. "We never evaluate well: do we need the things that we've done in the past, or has that expended its usefulness? So, this is just a better way for us to get a better handle on how we're delivering goods and services to citizens, and hopefully we get a better product out of the deal."

The head of one of the large state employee unions sees Anderson's evaluation plan as a threat, not a harmless exercise.

"This is just another version of cut government until you can fit it in the bath tub, then drown it," said Eliot Seide, executive director of AFSCME Council 5.

A 10 percent reduction in state agency operating budgets would translate into 3,500 employee layoffs, Seide said, adding that Minnesota's government workforce is already one of the leanest in the nation.

"This just seems to be an arbitrary and capricious number just to cut government. It has nothing to do with delivering good services."

Minnesota's executive branch, where the bulk of state government jobs lie, held about 34,354 positions in 78 agencies, according to a 2015 report.

DFL Gov. Mark Dayton's two-year budget proposal has operating increases based on individual agency needs, not an across-the-board increase.

Minnesota Management and Budget Commissioner Myron Frans said salary costs, for example, can vary sharply among agencies, depending on the number of older, higher-paid employees. He said the proposed operating budget increases range from less than 1 percent to about 3 percent.

In his written response to the two committee chairs, Frans chose not detail a 10 percent cut for his own department. He instead recommended adoption of the governor's budget.

"If anyone thinks that we can reduce government spending, that's fine. They need to step forward and tell us exactly what programs, what services they don't think Minnesotans need anymore, because that is the crux of the matter," he said. "If they want to do that, that's certainly their prerogative. But just to give a blanket 10 percent is really not, I don't think, doing their job," he said. They need to specify what do they want us to cut and where."

Minnesota Department of Health Commissioner Dr. Ed Ehlinger said he will be making a case for a larger budget over the next few weeks.

"Obviously one of our biggest expenses is personnel. But I always question what's the purpose of a cut?" he said. "Are we investing too much in public health? Are we doing things that really shouldn't be done, or are we not doing things appropriately? I would like to know what the premise is behind the request before I can really respond."