Dear Neighbor, Greetings from the House, where a new major topic of discussion seems to surface every day. Here is a look at just some of the latest developments: Minnesota’s fraud industry The Fraud Prevention and State Agency Oversight Policy Committee met on Monday and received testimony regarding the fraud industry in Minnesota. Bill Glahn, Policy Fellow at Center of the American Experiment and a former Commerce Deputy Commissioner, shared his Fraud, Waste and Abuse tracker. But Democrats spent most of their committee time trying to attack him personally, his organization generally and discredit his data which was fully sourced. What they seem to lack, is interest in talking about how the fraud happened or how to prevent it in the future. I personally found his thoughtful insights helpful about how to prevent fraud in the future. Click here for some news coverage of our meeting, including me speaking. Mr. Glahn’s main message is we need to stop the money going out the door in the first place. He supports creating an Inspector General to provide oversight of all government, which House Republicans propose. Economic forecast Minnesota Management & Budget issued a new economic forecast for Minnesota on Thursday, providing the official figures legislators will use to construct a new two-year state budget. Top-line items include: - $456 million projected balance for 2026-27, down $160 million from previous estimates.
- $6 billion general fund shortfall for the 2028-29 biennium, $852 million worse than November estimates.
- State spending growth outpaces revenue growth through projections for fiscal year 2029.
 Green = spending; red = tax revenue The last point about state spending outpacing state revenue comes as no surprise. That is because Democrats spent the state’s $18 billion surplus, raised taxes by $10 billion and increased the state budget by 40 percent with the budget they enacted in 2023. It should also be noted that the total amount of spending from all funds is $128 Billion. When is enough, enough? Democrats spent us into oblivion, and it is beyond disingenuous for them to now attempt to blame President Donald Trump for our state now facing a near-record shortfall. First of all, he hasn’t even been in the Oval Office 50 days. Furthermore, MMB’s November forecast called for a $5.1 billion shortfall – before President Trump even took office. All the speculation in the world regarding what President Trump may or may not do and how it may affect our state’s budget over the course of several years should not overshadow the concrete evidence we already have regarding what is impacting our state’s bottom line: Democrats spent the state’s record surplus and increased spending by 40 percent in the blink of an eye. To be sure, the forecast figures we received present a significant challenge as we work to pass a new state budget before the legislature is set to adjourn the third week in May. We will need to make some difficult choices along the way. That makes it all the more important to give due diligence to cracking down on fraud, waste and abuse in Minnesota. Each dollar we can protect is a step toward reconciling our bottom line. I continue working closely with this subject as a member of the new House Fraud Prevention and State Agency Oversight Policy Committee. Each day there seems to be a new revelation, another thread to pull that reveals another drain on taxpayers. There are so many rabbit holes to explore on this subject it’s hard to know where one stops and the next one begins. For example: I have served on the Subcommittee on Employer Relations (SER), which reviews all 19 of the state employee contracts. That bicameral subcommittee reviews settlement sheets, which outlines the anticipated taxpayer cost in aggregate for state employee contracts. The normal 2 or 3 percent cost-of-living adjustments per year would seem reasonable to most people – except now, after the Walz Administration negotiated with the state employee unions, all state employees got a 5.5% increase starting 7/1/23 and another 4.5% increase starting 7/1/24. When everything is added up, it’s nearly an 8 percent increase in salaries for the biennium costing taxpayers an estimated additional $861 million. Here is a link to the full settlement sheet. But there is more. In 2023 – before the budget exploded – I asked for information regarding the difference between what the state estimates state employee contracts will cost vs. what they actually cost once workers are paid. It was astonishing to learn state agencies spent $634.4 million over the estimate in three contracts alone during a two-year window. It’s as though our state has been treating contract settlement amounts as mere suggestions. Bargaining Unit Estimated to be spent (22-23 biennial base plus biennial new money needed) Actual Spent (24-25 biennial base) Difference (More money actually spent) AFSCME Council 5 $2,176,117,149 $2,271,170,710 $ 95,053,561 MN Association of Professional Employees (MAPE) $3,425,575,203 $3,852,748,170 $427,172,967 Middle Management Association $ 836,624,855 $ 948,795,126 $112,170,271 TOTAL $634,396,799 This is outrageous and nobody seems to be talking about it. No accountability. No repercussions for overspending contract budgets by 40 percent. And last biennium, Democrats gutted the power, authority and oversight ability of the SER. We no longer have the power to stop a contract from going into effect, and in fact the SER has not even met since December 19, 2023. This is an excerpt from an email I received as a member of the SER, “Amendments to Minn. Statute 3.855 adopted during the 2023 Session no longer require the SER to provide review and approval or disapproval of collective bargaining agreements and their related memorandums.” So, yes, this is an area that I’m working to address. I am working on legislation to restore oversight on state employee contracts because taxpayers deserve better than this gross overspending. It is concerning as we are in the midst of the budget cycle immediately following the one when Democrats sent the state budget into the stratosphere, so these settlement sheets could end up looking even worse before we can get a handle on them. Capitol visitors  It was my pleasure to recently meet with representatives of the Minnesota Citizens for the Arts (above). Rep. Walter Hudson and I also enjoyed meeting with Wright County Soil and Water Conservation District members (below).  |