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Budget reforms will renew Minnesota

The storms last week in Rochester, especially the flash downpour at the Olmsted County Fair Thursday, gave me pause to reflect on the "storm" that just ended: the government shutdown and resulting budget agreement.

The middle of a storm is high intensity. During the shutdown, legislative leaders and Gov. Dayton met for negotiations and conferred with members in the legislature. Those meetings resulted in several offers, made by both sides. After 19 days of government shutdown, an agreement was reached and a complete budget was passed. I was so relieved that Minnesotans could get back to work and our state could be back open for business.

The budget that was agreed upon was a package of bills that will not raise taxes, makes targeted reductions in spending, and slows the exponential growth of state government. One of the conditions of the agreement, set by Gov. Mark Dayton, was a $500 million construction bonding bill. One-time funds from the securitization of tobacco bonds is dedicated to debt reduction.

While storms can be damaging, they also have a renewing effect. Our agreement, showing true compromise, has aspects I agreed to but don’t agree with. While I disagreed with the school shift, initially suggested by Gov. Dayton on June 30, and the funds from the tobacco bonds, I couldn’t vote against the significant reforms in our agreement.

Minnesota will be renewed by the reforms in our budget — specifically, modifications that encourage job growth, improvements to education, and cost-saving changes in the area of health and human services.

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Our budget will help jumpstart Minnesota’s economy. We exchanged bureaucratic earmarking for competitive grants to job programs and start-ups. By making key investments in economic development funds, we can help Minnesota compete with other states when attracting new businesses.

A critical part of making Minnesota more business friendly to promote a jobs renaissance was to avoid Gov. Dayton’s $4.1 billion proposed tax increases. Our final budget doesn’t include any tax increases. What’s more? We included tax relief for small businesses, farms and homeowners.

Minnesota schools will also be revitalized under our budget. While I disagreed with the one-time education shift, it does allow us to give new, ongoing increases to per-pupil funding. Additional funding is connected to reforms focusing on results.

• Added $50 more per pupil in the funding formula each year of the biennium.

• Funded special education with inflation factors for a 9 percent increase over the biennium.

• Invested more money in Literacy Incentive Aid and the Minnesota Reading Corps.

Those funding increases are tied to critical reforms that give school districts flexibility and place the focus on results in the classroom. Our budget repealed the one-sided negotiation penalty for not settling contracts by Jan. 15 (this penalty cost the Minneapolis School District $800 million at their last contract negotiation) and repealed the "maintenance of effort" restrictions — empowering school districts with greater flexibility. We also connected teacher and principal evaluations to student test scores and established new compensatory pilot grants to assist large school districts, like Rochester, with significant overall numbers of low-income students but not concentrated numbers.

We transformed the fastest growing area of the state budget, Health and Human Services, reducing the cost curve in spending from a projected increase of 22 percent in the biennium to 4.8 percent. Under our new plan, the state saves money but we also hold down the cost for providers and consumers.

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• Dialed back the 2 percent MinnesotaCare Provider Tax to total elimination in 2019. This has a projected savings of $10 billion over 10 years for providers. Southeast Minnesota bears the largest portion of this tax.

• Avoided the governor’s proposed hospital surcharges — keeping the cost of health care down for consumers and saving Southeast Minnesota providers over $75 million.

I was glad that my analytics bill to improve how state government runs was included in the final budget solution. It uses recent technological advances to create efficiencies through smart buildings and fleet management. It would also significantly improve systems that prevent and detect Medicaid fraud. We estimate millions of dollars in savings in the next biennium using these 21st century tools.

I remain committed to mitigating the one-time school shift and tobacco bonds included in the final budget agreement. But our reforms are long-term and will help us curb costs and slow the expansion of government to secure a sustainable budget for future generations.

I am here to serve you; please don’t hesitate to contact me with questions or suggestions at (651) 296-4848 or sen.carla.nelson@senate.mn .

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