Facebook Twitter RSS

Tax cuts, not aid for struggling families, popular use for surplus funds.

Date Published: 03/09/2008


Bob Collins at News Cut reminds us that last time Governor Pawlenty used funds from the state's health care access fund to help balance the budget, he moved the money to the general fund. Though the tax collected from health care providers is earmarked to help low-income Minnesotans obtain health coverage, fewer people were were made eligible for the program as part of the shift.

This time will be different, according to the Governor.

Pawlenty says using the health care fund will be used for other health care "for the disadvantaged, and says nobody will be removed from government health programs. But, he conceded, an expansion of MinnesotaCare will be canceled. [Note: Some might call it a "restoration."] At the same time, the governor proposed a reduction in the state sales tax.

Ah, yes, draw down $250 million of the surplus in what MMA lobbyist now calls "the health care slush fund," shift elsewhere an equal amount formerly allocated for health and human services, and cut taxes $77 million.

Net: $173 million of the deficit reduced this budget cycle at the price of continued backsliding on health care and $179 million lower tax collections next biennium. (Not to mention another  $187 million in reductions to health and human services spending.)

Back in 2002 when the state was facing its prior budget deficit, and before Pawlenty raided fund, the Minnesota Budget Project noted that spending to aid struggling families did not fare too well during flush times, either. Between 1997 and 2001, 52.7 percent of surpluses went to tax cuts and rebates, 5 percent to budget reserves, 0.3 percent to children and families, and -0.2 percent to health and human services.

The Pioneer Press has a good summary of the devil in the details of Pawlenty's health and human services cuts.

Posted in:
Economic Justice · Taxes


Post Your Comment

Support Our Work