Final budget shifted $455 million in surplus money to shore up Health Care Access Fund

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spending signThe Minnesota state general funds budget continues to skyrocket.  The Governor and legislature recently approved a $42.5 billion 2-year budget which is a 17% increase from the first budget that Governor Dayton helped to craft four years ago ($35.3 billion) and a 30% increase from the last biennial budget under Republican Governor Pawlenty in 2010-2011 ($30 billion.)

One trick the House Republicans used was to spend $455 million of the $1.9 billion budget surplus to shore up the Health Care Access fund which pays for Minnesota Care, one of several taxpayer-funded health insurance programs in the state.  This Health Care Access fund is made up of a 2% tax on all health care providers in Minnesota, which is due to sunset in 2019.  Rather than deal with this pressing issue, the legislature kicked the can down the road by plugging the hole with the surplus money creating a new base level of spending that will be hard for future legislatures to meet.

One can view this under-reported $455 million spending maneuver on the House budget spreadsheet under Health and Human Service.

The overall spending increase was over 8%, which doesn’t even come close to Republican campaign promises to bring the government spending trajectory more in-line with a family household’s.  The Republican claim that spending is the “3rd lowest increase in 50 years” fails to mention that this spending included zero in tax cuts when they had proposed $2 billion.  $850 million of the budget surplus has been set aside and promised as tax cuts in 2016.

Republicans in the House originally proposed a $40 billion budget and finally agreed to spend $42.5 billion through a massive budget shift.  The Democrat Senate proposal was $42.7 billion and Governor Dayton’s $42.9 billion.

Divided government isn’t so divided after all.

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