Consequences: The Impact of Minnesota's Government Budget Cuts
In
the 2003 Legislative Session, Minnesota faced a serious budget deficit. The $4.5 billion solution that policymakers
passed for the 2004-05 biennium relied heavily on service cuts ($2.1 billion)
and shifts and transfers ($1.7 million), most notably from the Tobacco Endowment.
Although
the agreement was made to address the deficit without raising state taxes, the
state did raise $738 million in general fund revenues through a patchwork of
fee increases, higher copayments, and redirecting dedicated funding sources and
fund balances. The $738 million does
not include the increased cost of tuition at the University of Minnesota or in
the Minnesota State Colleges and Universities (MnSCU) system, nor increases in
property taxes that may arise from the increased pressure on local governments
caused by significant aid cuts.
Although
the final impact of the 2003 budget choices is not yet known, initial
information from state agencies, research organizations, community
organizations, and the press demonstrates that the deficit solution has already
had a serious, negative impact on the lives of Minnesotans. Some of the consequences of service cuts are compiled below.
There
is more to come on this story. Some of
the cuts increase in the second year of the biennium, and many of those
responsible for implementing the cuts — in local governments and community
agencies across the state — have been able to postpone the brunt of the impact
through use of reserves or other one-time measures. Many expect the impact to be worse in 2004 and 2005 than what has
been seen so far.
Families and Children
Minnesota’s families face a range of budget impacts that make it more difficult to make
ends meet and to provide high quality care for their children.
- 13,554 Minnesotans — including parents, children, pregnant women, and adults without children — are expected to lose
their health coverage from one of the Minnesota health care programs (General
Assistance Medical Care, Medical Assistance, and MinnesotaCare) in FY
2004. This number grows to 26,646 in FY 2005. Those who continue to have health
care coverage will pay new copayments for most office visits, eyeglasses, and prescriptions. Families and individuals on MinnesotaCare
with incomes above the poverty line have been assessed higher premiums.
- 1,200 Minnesota families lost their child care assistance as a result of a 50% cut in
funding for the Basic Sliding Fee program.
Those who continue to receive assistance face copayments that are an
average of 57% higher for families of three or four — an additional $936 a year
for a family of four earning $32,200.
Nearly 8,000 families in 46 counties are on the waiting list for child
care assistance – nearly double the number on waiting lists a year ago — and
some families are told to expect to wait at least two years before receiving
help.
- Among the consequences of cuts to the
Minnesota Housing Finance Agency are that 450 fewer households will receive
downpayment and closing cost assistance from the Homeownership Assistance
Program
and 300 fewer households will receive counseling to avoid foreclosure or
training to become homeowners.
- An estimated 56,000 parents seeking
help from the state in collecting owed child support will be charged new fees of 1% of the
amount collected.
- Minnesotans will pay a range of new or
increased fees relating to the judicial system for things such as parking
fines, subpoenas, deposit of wills, and marriage licenses.
- Parents who learn how to ensure the
healthy growth and development of their young children through the Early
Childhood Family Education (ECFE) program face higher fees to participate.
- School groups visiting the State
Capitol or Minnesota Zoo are now charged entrance fees.
- K-12 students will no longer have
access to violence prevention programs in their schools funded by state
Violence Prevention Grants, as this funding source has been eliminated.
- Funding cuts to the WIC program, which
provides nutritious foods, nutrition counseling, and health care referrals, mean that clinics are being closed, fewer women and children are being served,
and less nutrition education is provided.
Some people are now driving over 50 miles to receive their WIC vouchers,
and waiting lists are increasing. Some
increased demand is being shown among families with members in the Reserves or
National Guard.
- A survey of public health departments
reports reduced immunization rates in communities that can no longer afford to
send immunization reminder notices.
Lack of immunizations has repercussions beyond the health aspects —
without up-to-date immunizations, children cannot enroll in Head Start, child
care programs, or school.
Persons with Disabilities
While some have argued that everyone should help solve the budget deficit, the most
vulnerable persons in our communities have been asked to pay for a large share
of the budget solution.
- Fees have increased for parents
who receive services that enable them to care for their disabled children in
their own homes. These fee increases
can be several thousand dollars a year.
More than 300 families appear to have stopped receiving services due to
increased fees.
- More than 6,800 low-income families
with disabled family members participating in the Minnesota Family Investment
Program (MFIP) have lost at least $125 per month in assistance — a total of $1,500 a year.
- Persons with diabetes who are covered
by state-funded health programs no longer have coverage for testing strips,
which they need to monitor their blood sugar and manage their insulin
levels. This is expected to lead to
serious, and more costly, complications.
Families and Individuals in Crisis
In a weak economy, many Minnesota
families are just a paycheck away from serious hardship. Budget cuts have created holes in the safety
net that help families weather a temporary setback.
- Cuts to the Emergency Services Program,
which funds 26 emergency shelters and agencies serving the homeless, are
expected to lead to hundreds more persons being turned away from shelters due
to insufficient space (in addition to the 1,000 a night who already go
unserved).
- Budget cuts to programs serving
battered women, crime victims, victims of sexual assault, and abused children
mean less access to services. Service
providers in Greater Minnesota report that victims in some communities will
need to travel long distances to get help.
- Legal Aid provides low-income people, the elderly, disabled persons, and children
with civil legal services they could not otherwise afford. There has been a 32% reduction in the number
of attorneys in Legal Aid programs since 2001, due to cuts from state funds and
other sources.
Workers and Employers
Funding cuts and policy changes that
make it more difficult to access education and training call into question
whether Minnesota will retain the high quality workforce that has been one of the
keys to the state’s economic success.
In addition, many high quality jobs in both the nonprofit and government
sector have been lost as a result of budget cuts.
- Fewer people will have access to high
school diploma completion or workplace skills classes due to cuts in the Adult
Basic Education program, while those who can participate will be assessed higher fees.
- Workers seeking to enhance their skills
will be hurt by cuts in financial aid and higher tuition and fees. For example, students in the MnSCU system
face an average increase of 12.2%, or $372, in their tuition and fees in FY
2004.
- Low-income workers wanting to enter the
health care field no longer will be able to do so through the Health Care and
Human Services Worker Training Program, which was cancelled despite a worker
shortage in health professions.
- Parents participating in the Minnesota Family Investment Program will no longer have
access to education and training unless they are already working 20 hours a
week.
- In a survey of nonprofit organizations impacted by government funding changes, 72% of respondents had
made staffing changes (layoffs, leaving positions unfilled, and cutting back
hours) in 2003. 60% of respondents cited
state budget cuts as a contributing factor in staffing changes, and 31% said
local budget cuts played a role.
Unemployment Insurance claims filed by nonprofit workers were up 3.5% in
January 2004 compared to one year ago, and up 7.8% from two years ago.
- In a survey of cities, 26% of those responding had
reduced the size of their workforce.
- Businesses face a range of increased
fees, including for fire marshal hotel/motel inspections, boiler licenses, and
food handler inspection fees.
Students
Education
and training is an important element in creating our future workforce. But budget cutbacks could close off
opportunities to students as the price of admission climbs higher.
- High school students striving for
academic excellence through Advanced Placement and International Baccalaureate
face higher fees for participation in these programs.
- Students in the University of Minnesota and Minnesota State Colleges and Universities
systems will see double-digit tuition increases in each of the next two years.
- All 58,760 Minnesota students eligible for financial aid from the Minnesota State
Grant program will have their grants reduced, some receiving reductions of several
thousand dollars. Around 9,000 students
will lose all financial aid in FY 2004.
At-Risk
Youth and Children
Government funding to community organizations helps
make it possible to assist children who have been victimized or are at risk of
abuse, or to intervene with kids who have made mistakes and help them get
things straight while they are still young.
Many of the critical prevention and intervention programs for this
vulnerable population were impacted by budget cuts.
- Young people who are struggling with
academic success and/or have been involved with the criminal justice system
will no longer be able to attend community programs funded by After School
Enrichment Grants. Several programs
receiving this funding have closed, while others have eliminated meals and
snacks or transportation.
- Funding from the Tobacco Endowment for
programs to prevent use of tobacco among youth was eliminated. Between 2000 and 2002, these programs
stopped 13,800 Minnesota kids from becoming addicted to tobacco.
- Hundreds of children no longer will
receive extra school and behavioral assistance due to cutbacks in the Foster
Grandparents program.
- In a survey of local public health
departments, the majority of respondents noted that budget cuts have meant cuts
in family home visiting, including prenatal and new baby visits. Prevention and early intervention services
for youth and families have also been reduced or eliminated.
Immigrants and Refugees
In
the coming decades, New Minnesotans will become an increasingly critical
component of the state’s workforce.
However, budget cuts impacted programs that prepare these populations
for their role in our changing economy.
- Fewer people will be able to access
English as a Second Language (ESL) and citizenship classes due to cuts in Adult
Basic Education, while those who can participate will pay higher fees.
- About 4,000 immigrants have lost their
health care coverage through General Assistance Medical Care. Some have life-threatening illnesses such as
drug-resistant tuberculosis or cancer, or are in need of transplants.
Minnesota’s Communities
State budget cuts, including reductions to local governments, are eroding some of the
services and amenities that make Minnesota a great place to live and work.
- State aid to cities and counties were
cut by 24% for the 2004-05 biennium. In
a survey of cities, 32% of those responding had reduced infrastructure spending in
2003 and 23% had reduced public safety spending. More than half are contemplating additional cuts in these areas
in 2004. In a survey of counties, those
responding indicated that they would be offering a lower level of service to
their citizens, including longer waits and less contact with county staff.
- In a survey, local public health departments expressed concern that they no longer
have any kind of cushion to address potential crises, such as blizzards,
floods, or an outbreak of disease such as SARS or influenza.
- Libraries across the state have reduced staff and cut back on services, and some branches
have closed altogether.
- State funding for the arts was reduced, despite a recent survey that showed that 94%
of Minnesotans believe that “the arts and cultural activities make Minnesota an
attractive place to live and work,” and 67% of Twin Cities residents in another
survey said they supported government funding for the arts. In a survey of nonprofits impacted by government budget
cuts, 66% of arts organizations responding said they had made staffing changes
in the last year, and 50% of the reported staffing reductions were actual lay-offs. State funding cuts was the most commonly
cited reason for the staffing reductions.
Programs and services in the arts are being cut back in all parts of the
state.
- Minnesotans will pay higher fees to enjoy Minnesota’s environment, with increased costs for licenses and camping
fees.
Seniors
Minnesota’s
seniors have spent their lives contributing to the state's quality of
life. As they age, many find they need
some additional help in living independently.
Unfortunately, these programs were also victims of budget cuts.
- The policy that allows the state to
place liens on the property of seniors using the Alternative Care program has
caused a 25% reduction in the number of people served by the program, which
offers housekeeping, transportation, and other assistance to help seniors to
stay in their homes. Of those dropping
out of the program, 10% went into nursing homes, which cost more than five
times more than the Alternative Care program.
- Fewer vulnerable seniors will benefit
from the Senior Companion program, through which active seniors help the frail
and elderly stay in their own homes and communities.
Information Sources
This
document compiles information from a number of sources, including Affirmative
Options Coalition, Association of Minnesota Counties, Children’s Defense
Fund-Minnesota and Child Care WORKS, House Fiscal Analysis, Housing Minnesota,
League of Minnesota Cities, Lutheran Social Service, Minnesota Citizens for the
Arts, Minnesota Council of Nonprofits, Minnesota Department of Employment &
Economic Development, Minnesota Department of Health, Minnesota Department of
Human Services, Minnesota Higher Education Services Office, Minnesota Library
Association, Minnesota News Connection, Minnesota Public Radio, and Star
Tribune.
February 2004
|
ABOUT US