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Budget commissioner says higher ed cuts might not happen

By Heather J. Carlson

Post-Bulletin, Rochester MN

For colleges and universities fearing steep funding cuts, the state’s budget commissioner on Friday offered a glimmer of hope while speaking before a crowd of Rochester business leaders.

Minnesota Management and Budget Commissioner Tom Hanson said that strings attached to the federal stimulus money coming in to the state mean the governor’s proposed cuts to higher education will not happen.

Hanson said the state will get $650 million in stimulus money dedicated to both K-12 and higher education.

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"We are going to have to buy back the higher education cuts we recommended in January," Hanson said during a Rochester Area Chamber of Commerce Eggs and Issues event.

That news caught local higher education officials by suprise. Rochester Community and Technical College’s Chief of Strategic Operations Dave Weber said this is the first he has heard that stimulus money might prevent some of the proposed cuts.

"I was caught off guard," Weber said.

Gov. Tim Pawlenty’s proposed two-year budget had called for an 8.2 percent budget cut for higher education. RCTC has been bracing for a cut ranging from $1.5 million to $2.2 million at a time when enrollment is on the rise.

Learning about the stimulus money

The uncertainty surrounding the stimulus dollars just highlights the complexity. Hanson said he is going to "federal stimulus school" next Thursday in Washington, D.C., just to try to understand how the money can be spent. Besides helping craft the budget, Hanson has also been designated the state’s federal stimulus coordinator.

Hanson told the crowd there are three types of stimulus money available. There is $2.6 billion flowing to the state to be used to help its general fund, with $1.8 billion of those dollars designated for medical assistance. The second category is money for infrastructure projects, with $500 million set aside for highway construction. The third set of stimulus dollars are in the form of competitive grants that states must apply for in a wide range of categories, including health information technology and rural broadband.

A big concern among those in the Rochester audience centered around what happens in future budget years when the stimulus dollars are gone.

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"It is one-time money I assume. So if we embark on spending based on this, then we may exacerbate things in the longer term," said former Republican Rep. Fran Bradley of Rochester.

Budget worries

To try to address some of those concerns, the governor plans to move ahead with proposed cuts to areas like health and human services once the stimulus restrictions are lifted in 2011.

Democratic Rep. Tina Liebling of Rochester also voiced concern about the state’s growing budget gap and reliance on one-time dollars and a proposed $1 billion in tobacco bond borrowing.

"Frankly, I don’t see how (the governor) can solve a problem of this magnitude without raising some new revenue," Liebling said.

Hanson said it is possible to balance the budget without a revenue increases. He added that while the tobacco bond borrowing idea is controversial among lawmakers, it is a good alternative in tough budget times.

He added, "It’s not my favorite option, but it was better then increasing your taxes and cutting spending even more."

For more information, go to Postbulletin.com/weblinks.

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Weblinks: Minnesota Management and Budget Office http://www.mmb.state.mn.us/

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