FY2012-13

Budget: Limiting Spending and Achieving Long-Term Reform

Spending FY2012-13: Forecast: $39 billion Gov Dayton: $37 billion Final Agreement: $34.3 billion

Spending:
$1.8 billion General Fund appropriation, $20 million less than the Governor proposed Resolves a 2009 DFL accounting failure and correctly accounts for a $27 million hole in the Dept of Corrections fund Funds at a level to maintain core services within the courts

Reforms:
Prioritizes the use of state funds on state cases over federal cases Specifies that funding increases are used to alleviate caseloads and pay for specified operations costs Prohibits additional funding for increased employee salaries Requires a co-payment for prison inmate initiated healthcare Saves counties money through lower reimbursement rates for medical services to local prisoners

Spending:
$4.7 billion total appropriation (Dedicated and General Fund) for state and local roads, public safety and transit $125.7 million General Fund appropriation, $55 million less than the Governor proposed Cuts spending by $42 million from current levels Provides over $2.5 billion for jobs related to the construction and maintenance of Minnesota's trunk highway system

Reforms:
Creates a Trunk Highway Economic Development Account to promote economic development, improvement and relieve growing traffic congestion Improves transit financing and public transparency Requires development planners to disclose both capital and long-term operating expenses highway

Spending:
$4.1 BILLION in DFL and Gov. Dayton TAX HIKES BLOCKED $600 million (17 percent) reduction in projected FY2012-13 state aids and credits $750 million (20 percent) reduction in future spending, achieved through permanent

long-term

spending

cuts

Reforms:
Provides $30 million in net tax relief, including estate tax relief for farms and small businesses, sales tax exemption for townships, sales tax exemption for public safety water, and sales tax exemption for resale ticket purchases Freezes city and county aid at 2010 levels, providing budget and funding stability to local officials Modifies county maintenance of effort (MaE) requirements to allow for greater flexibility and cost savings in delivering local services Increases homeowner's property tax refund program and provides more direct property tax relief to middle and lower income homeowners Includes federal tax conformity to simplify taxpayer filing and tax administration Replaces the current broken market value homestead credit program and converts it to a comparable exclusion on

homeowners' property tax Suspends the Political Contribution Program is suspended for two years Includes federal taxes in the Tax Incidence Study, allowing for a more accurate portrait of the burden on MN taxpayers

Spending: $13.6 billion General Fund appropriation, $600 million less than the Governor proposed and $2 billion less than projected FY2012-13 spending NOTE:An extension and expansion of the education aid "shift" is induded in this measure pursuant to an overarching budget agreement between legislative leaders and the governor o As in the past, existing law provides that the shift will be bought back when the economy recovers and state revenues increase enough to build up a budget surplus o After taking the effect of the shift into account, the bilI appropriates $13.6 billion over FY2012-13 ($6.3 billion in FY2012 and $7.3 billion in FY2013) $50 increase in per pupil funding allowance Special education funding increased according to current law growth factors

Extends by two-years the relief from requiring local districts to spend 2 percent of their basic revenue on staff development Ends the inefficient and uneven Integration Revenue after FY2013.to be replaced with a yet undetermined program and spending distribution Repeals the state's authority to borrow from school districts with reserves during a fiscal year (the payment shift is different because that splits payments over two different fiscal years)

Requires school districts to "earn" Literacy Incentive Aid funds through student reading test scores in the early elementary grades Creates Early Graduation Scholarships, aJIowing academically capable and hard-working students to complete their high school education early and to take the funds to the college of their choice Requires regular evaluations of principals and teachers: student test scores must be connected with the rating of the teacher

Spending:

$2.57 billion General Fund appropriation, $180 million less than the Governor proposed and Cuts spending by $246 million from current levels $21 million increase for the State Grant program to improve and expand choice in higher education Increases funding for the Work Study program to allow more students to work their way through college

Reforms: Enacts tuition limitation at MnSeU's two year institutions, forcing systematic reform and efficiency

Requires the U of MN and MnSCU schools to meet performance benchmarks to receive a portion of their funding Utilizes need-based State Grant program and Work Study programs to drive expanded choice in higher education, employment opportunities for students, and minimizes student loan debt

Spending: $11.3 billion General Fund appropriation, $700 million less than the Governor proposed projected spending Future spending (tails) reduced from a projected 11.5 percent increase to a significantly increase No increased surcharges are included in the final agreement There are no rate reductions to nursing homes in this bill and $1 billion less than lower 4.8 percent

Reforms: Bends the curve on health care spending to slow the massive growth in the fastest growing part of the state budget Creates a defined contribution to privatize public health care for some MinnesotaCare recipients Controls the number of people allowed on the waiver programs through limits on Elderly and Developmental Disability Waivers Repeals the provider tax Provides tax relief from the MinnesotaCare provider tax with a blink-on or off depending on the financial structure of the Health Care Access Fund. Prevents welfare fraud by strengthening welfare eligibility requirements and placing greater photo ID requirements and restrictions on the use of EST cards for alcohol or tobacco purchases Includes County Service Delivery Authority, allowing counties to consolidate human service departments into delivery authorities Repeals entirely the nursing facility and hospital rebasing, drastically reducing falsely inflated forecasted spending for health and human services Limits the Medicaid fee-for-service spending for the next 4 years 1& Increases funding to small, rural nursing homes and rural pharmacies Modifies MFIP requirements and makes changes for recipients Accepts the Governor's Medical Assistance early enrollment program, but also ensures that reforms and cost containment efforts would be done to serve the adults without children below 75 percent FPG Accepts the Governor's proposal to ask the federal government for a series of waivers but seeks accompanying reforms: o Promoting personal responsibility and encouraging and rewarding healthy outcomes, encouraging utilization of high quality, cost effective care through Medicaid and MinnesotaCare enrollee cost sharing o Redesign home and community based services for people with disability in order to ensure a more sustainable system o Changes to the Elderly Waiver to improve access to housing, redesign of assessment tools, transition and relocation efforts, refinancing of Alternative Care and Essential Community Supports, and providing Medigap coverage for those not eligible for MA o Health Care Delivery Demonstration Projects to test alternative payment service and delivery models for Minnesota Health Care Plan fee-far-services recipients and managed care enrollees and support an improved primary care coordination model for recipients

Spending: $237 million General Fund appropriation, $39 million less than the Governor proposed Cuts spending by $75 million from current levels No fee increases No tax increases Reforms: Provides budget flexibility to maintain outdoors

and deal with critical issues such as aquatic invasive species and

chronic wasting disease Requires review of state agency water management to streamline and consolidate among all agencies that have water programs Reforms state tree nursery program to devise along-term business plan for sustainability without competing with the private sector

Spending: $154 million General Fund appropriation, $11 million less than the Governor proposed Cuts spending by $41.4 million from current levels Prioritizes spending on private sector jobs and business programs, not earmarks and special interests Reforms: Ends DFLpractice of pass-through grants and legislative earmarking for special interests Creates three competitive grants programs in the Department of Employment and Economic Development Encourages small-business expansion through newly created loan guarantee program Cuts funding to the MN Trade Office at an ongoing rate of 5 percent per year Minimizes the use of fees

Spending: $76.8 million General Fund appropriation, $1 million less than the Governor proposed Cuts spending by $9.9 million from current levels Prioritizes spending on the livestock and grain industries, the health and safety of our food supply system, and our ever-increasing export programs Reforms: Ends ethanol subsidies by making the final ethanol producer deficiency payment in 2012

Spending: $818.9 million General Fund appropriation, $53.6 million less than the Governor proposed Cuts spending by $68 million from current levels Reduces funding for constitutional offices, the legislature, and state agencies by 5 percent Increases spending for Veterans Affairs and Military Affairs by 2.7 and 6 percent respectively Reforms: Consolidates Office of Enterprise Technology services throughout government Requires E-Verify status check to be used by all businesses that contract with the state Establishes a Sunset Advisory Commission to review state agencies, improve operations, and consolidate programs Calls for strategic sourcing with private firms to ensure efficiencies in state buildings and vehicle fleet management Requires the Department of Revenue to seek tax fraud prevention measures and increase delinquent collections Links state employee pay to performance, with salary increases subject to sufficient ratings Issues up to $10 million in appropriated bonds through MNManagement & Budget in a "pay for performance" pilot project with cost efficient non-profits