2A, Discussion with Senator Barb Goodwin & State Rep Kate Knuth

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Budget Resolution Introduced Page 1 of 2 Budget Resolution Introduced The resolution, introduced by Rep. Mark Buesgens, could reduce state aid and credits to cities. (Published Jan 12, 2011) Although the February state budget forecast will not be released for at least another six weeks and Gov. Dayton has not yet released his budget recommendations, Rep. Mark Buesgens (R Jordan) (Link to: http /www.house.leg.state.mn.us /members /members.asp ?id= 10081) on Jan. 10 introduced a resolution on the state's budget for the upcoming two -year period. Under House Resolution (HR) 2 (Link to: https: /www.revisor.mn.gov /revisor/ pages /search _status /status_detail.php? b= House &f= HR2 &ssn =0 &y =2011) state spending for fiscal year (FY) 2012 -2013 would be limited to the level of spending in FY 2010 -2011 (a total of $30.3 billion), and the state would reestablish a budget reserve of $653 million. That total spending figure for FY 2010 -2011 reflects reductions as a result of the shift of $1.9 billion in school aid payments, and the property tax levy recognition shifts. The state's receipt of $2.3 billion in federal stimulus funding was also booked as a reduction in state spending. Under current law, state spending is projected to increase to $38.6 billion, but that figure includes the current law repayment of the $1.4 billion in delayed school payments from the 2010 -2011 biennium. For local units of government and property taxpayers, the amount spent on property tax aids and credits is limited to $3.018 billion. Under current law, spending for that category is expected to rebound to $3.469 billion in FY 2012 -2013 because the 2010 Legislature made only a portion of the 2010 cuts permanent. For example, of the total city aid and credit reduction of roughly $180 million in 2010 (which are paid from the state's FY 2011 budget), $56.5 million per year was extended into the FY 2012 -2013 biennium. In summary, if the Legislature adopts a budget based on HR2, spending for the broad area of property tax aids and credits would have to be reduced by about an additional $450 million over the two -year budget cycle. The table below summarizes the possible reductions in the largest programs in the broad category of state expenditures titled "Property Tax Aids and Credits" if the legislature adopted a budget for FY2012- 2013 with the exact distribution of aids and credits after all reductions in FY 2010 -2011. EtZgatt 5, 4rd 1 j ptr fax ilftW Actual x 012 2 �1 3 .nditur Expenditures E� it 20,329 2 21' .2x DcSei 1H. Appiltd mkt! 2O O 2O1 MOM-) 6, AGU p MINNESOTA CITI ES Of course, under the resolution, the Legislature would need to meet only the restriction set for the broad category of spending over the two -year biennium and, therefore, the distribution of adjustments to http: /www.lmc.org /page /1 /budgetres- hr2.jsp 1/12/2011