Legislative Notebook: Health Bill Cuts, But Increases In Some Areas

By Danielle Killey and Don Davis

The House health and human services budget combines new revenue, cuts and savings from changes such as federal health care reform to make an overall $150 million spending reduction.

“Cutting $150 million from this budget was not a desirable or easy task, but we have achieved our goal of making significant reductions in the HHS budget while protecting the most vulnerable Minnesotans,” Health and Human Services Finance Committee Chairman Tom Huntley, DFL-Duluth, said.

The two-year plan includes about $100 million in new hospital surcharges. Huntley said at the same time hospitals are expected to receive $800 million in extra state and federal funds over the next four years because of federal health care reform.

Huntley said he does not like the hospital surcharge, but “given the influx of federal dollars, we felt this surcharge was one of the least harmful ways to reduce overall spending …” he said. “This is a very controversial issue.”

“As someone who represents Mayo Clinic back in Rochester, we are very concerned about that provision,” Rep. Kim Norton, DFL-Rochester, said Tuesday.

Huntley had to trim from most areas of the budget to meet the target, he said.

“It’s going to be painful,” he said. “There’s a lot of cuts.”

Huntley did increase pay by 2 percent for long-term care providers, such as nursing homes, that have not had a raise in more than four years. He also fully funded many mental health programs included in the governor’s proposal, including expanded school-based mental health services and mental health crisis response services.

Senate Democrat leaders also proposed a $150 million cut in the health and human services budget, but have not provided details.

The health and human services budget runs about $11.4 billion for two years, second in size only to education funding in state spending.

Simpler LGA formula

A Senate committee is considering a plan to simplify and make more predictable state Local Government Aid payments to cities.

“One of the main reasons I ran for the Legislature was to stabilize the state-local partnership,” Sen. Roger Reinert, DFL-Duluth, said Tuesday. “During the five years I served on the Duluth City Council, I saw first-hand the disconnect between our city’s need and the aid the state provided. This instability created serious problems for our budget, and left us with very few tools with which to balance our city budget.”

Reinert’s bill, and a similar one in the House, will be considered when tax committees finalize their bills in coming days.

Besides making the formula simpler, the bill would allow more suburbs to receive state aid. Now, 70 percent of LGA goes to communities outside the Twin Cities, while the Reinert bill would direct 60 percent to greater Minnesota.

Democratic Gov. Mark Dayton and Democrats who control the House and Senate suggest increasing LGA funding by $80 million.

Lockout provision OK’d

It appears the House jobs bill will include a provision requiring employers who lock out employees in labor disputes to pay three years of unemployment claims.

The Ways and Means Committee inserted the amendment into the jobs bill on a 15-11 Tuesday vote.

“It has become the weapon of choice by employers to declare a lockout…” Rep. Tim Mahoney, DFL-St. Paul, said. “It is a simple method of employers not negotiating.”

But Rep. Greg Davids, R-Preston, said it was “very troubling to me” that the financial Ways and Means Committee was taking on a policy amendment.

Earlier this session, locked-out American Crystal Sugar employees from Red River Valley plants testified about their situation and urged that businesses be required to pay more unemployment benefits.

E-pulltab gamers fire back

Backers of electronic pulltabs say their games are building steam even as discussion increases to replace them as a source of funding for a Vikings stadium.

Express Games admits that bars and charities offering pulltabs have been slow to adopt the electronic games, but wagering on Express Game pulltabs should top $10 million by the end of this month.

“In bars where our exciting and entertaining games have been installed, however, the results have been what the state expected,” Express Games founder Jon Weaver said. “As we gain acceptance from more establishments and the airport, we believe that the games will continue to gain popularity.”

The supplier has provided 450 devices to 110 facilities in the Twin Cities, St Cloud, Mankato, Duluth, Alexandria and Rochester.

This month, six e-pulltab sites will open at the Minneapolis-St. Paul International Airport.

The leader of the group representing charities that use gambling to make money said he is optimistic.

“Building on our strong paper base, the e-game trend is encouraging,” said Allen Lund of Allied Charities of Minnesota. “Yes, we still are short of the number of sites we need. But the trend is in the right direction.”

Many legislators have complained that e-pulltabs only bring the state a small fraction of what was promised a year ago when they were picked as the method to fund the state portion of a nearly $1 billion football stadium. There are calls to find new funding methods and Gov. Mark Dayton said a solution is needed before the Legislature adjourns for the year next month.