Dear Neighbor, It is finance bill season in the House, and we have been busy assembling bills to fund various aspects of state government and, together form Minnesota’s budget for the next two years. Here is a closer look at that subject and more from the Capitol: Budget agreement A 67-67 tie in the House means bipartisanship not only is a must for bills to pass this session, but it is necessary for us to even start budget work in earnest. On that note, it is good to report both parties have agreed on the overall framework of a new state budget. It includes the largest spending reduction in Minnesota history to address a projected shortfall. The high points of the agreement include cutting $4 billion from the current budget, with an additional $1.2 billion reduction in 2026-27. Reduced spending is essential after Democrats in full control of the Capitol spent the $18 billion surplus, raised taxes by $10 billion and increased the state budget by 40 percent in 2023. We now are facing a $6 billion shortfall. It is within those parameters chairs of finance committees are working on bills to fund their respective sections of the state budget and have a complete package in place by our May 19 deadline to adjourn. Higher Education budget As Chair of the House Higher Education Finance and Policy Committee, our committee has been tasked with setting a budget with a $0 increase for the next two years, and with a $0 increase for the two years after that. No, we are not simply going to do a copy-paste of the current budget for the next two cycles. Far from it, in fact. As previously noted, I’ve been leading a top-down, inside-out examination of our state’s Higher Education budget to determine exactly what is happening with the tax dollars our state is providing. To my knowledge, nobody has gone to the depths we’ve gone by poring over data and asking tough questions this session. One issue we are working to resolve is closing the $239 million biennial funding gap in the State Grant Program. That $239 million shortfall is larger than one full year of grants issued to students by the Office of Higher Education. There are numerous factors that have led to this gigantic hole in the State Grant Program, but six straight years of Democrat policy and statute changes is the biggest. Here’s the good news: Republicans are proposing to close the massive funding gap through cuts to other areas of the budget, then applying those savings to the state grant and dialing back the overly generous parameters (levers) that sent money flowing out like a high-pressure fire hose. More details to come in my next update. Fraud notes The House Fraud Prevention and State Agency Oversight Policy met again Monday and focused on how federal COVID relief money was spent. I was shocked, and I’ve heard a lot of things in my 13 years in the legislature. First of all, $76 billion poured into the state overall. To put that in perspective, our last General Fund state biennial budget was $72 billion.  Second shocking item was the lack of oversight. According to the testimony from the Commissioner, the multiple single area audits performed were very high level. They touted in their testimony that their audits came back "clean." But, after a deeper dive, we discovered that the audits just looked at if policies were followed, basically a check the box audit. No one looked any deeper. These type of audits are NOT MEANT TO FIND FRAUD. (Click on above image for a quick clip of me addressing this issue during Monday's committee meeting.) Third shocker is that the performance of these audits was put out for an RFP or competitive bid after the Office of Legislative Auditor (OLA) declined to do them. The bid was "won" by the very partisan State Auditor, led by Auditor Blaha (DFL), who ran with Walz in the last two elections. I questioned the Commissioner as to which other companies in Minnesota have the ability/capacity to perform these type of audits. They said they would have to get back to me and didn’t know off the top of their heads. I also wanted to know exactly what they were looking at and what they were not looking at when performing the audits. They didn’t know that either. They said that the Department of Health would have to speak to that. Whistle-blowers I’ve spoken to lead me to believe that very little oversight existed during COVID. Fourth disturbing thing was WHO decided what was actually audited. We discovered that "the federal government" under Biden, and the auditor who won the bid, in these cases was the State Auditor (DFL) decided what data, processes and procedures were audited. Can you tell me you have a conflict without telling me you have a conflict? Bill aiding domestic violence victims passes House  The House last Thursday overwhelmingly approved a bill I authored to improve domestic violence victim notification requirements and update the process. We want victims of crime to feel safe and informed and this bill helps in that regard by ensuring victims have the information and tools they need to seek justice. The bill (H.F. 1998) passed the House 132-0 and now awaits Senate approval before it can be presented to the governor for enactment. Non-profit worker salaries The issue of exorbitant salaries paid to non-profit executives at organizations receiving taxpayer dollars has been a recurring theme in recent newsletters. This became an issue in the House after I dug into 990 tax forms and raised red flags by highlighting how non-profit executives are taking salaries in the hundreds of thousands of dollars. The story of the 2nd Harvest Heartland CEO, who was taking a salary of $721,000, recently resigning has made major headlines in Minnesota and even became a national story. Once again, my main goal is to make sure salaries at taxpayer-funded organizations are reasonable. 2nd Harvest told me personally that it is going to "restructure its pay scale" downward, which is good news for donors and taxpayers. I will continue working on this issue because it clearly is not isolated. |