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Minnesota State Budget: Projected Budget Deficit and Budget Overview January 2011

Minnesota State Budget: Projected Budget Deficit and Budget Overview January 2011. Minnesota Senate Fiscal Staff Office of Senate Counsel, Research and Fiscal Analysis. MN Senate Fiscal Analysts Committee Assignments 2011. Presentation Outline.

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Minnesota State Budget: Projected Budget Deficit and Budget Overview January 2011

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  1. Minnesota State Budget: Projected Budget Deficit and Budget OverviewJanuary 2011 Minnesota Senate Fiscal Staff Office of Senate Counsel, Research and Fiscal Analysis

  2. MN Senate Fiscal AnalystsCommittee Assignments 2011 MN Senate Fiscal Staff

  3. Presentation Outline • Recap the November 2010 State Budget Forecast — General Fund • Budget Overview • “All Funds” • General Fund • Overview of individual budget areas Unless otherwise noted, all figures reflect FY 2012-13 projections, based on the November 2010 budget forecast. MN Senate Fiscal Staff

  4. The Role of Legislative Fiscal Staff • Analyze spending and revenue proposals, including modeling of many proposed education and tax law changes. • Request and interpret Fiscal Notesand Revenue Estimates; interface with state agencies to ascertain information in support of the policy process. • Draft budgetary legislation. • Track budget proposals and decisions using Spreadsheets. • Support legislative oversight of enacted budgets. MN Senate Fiscal Staff

  5. General Fund Budget Forecast (November 2010) • Current Biennium (FY 2010-11) — $399 million positive balance assumed to carryforward to FY 2012-13. • FY 2012-13 — $6.2 billion deficit after carryforward. • Budget “Tails” (FY 2014-15) — absent ongoing changes, a significant budget gap continues ($5.1 billion). MN Senate Fiscal Staff

  6. General Fund Budget Forecast (Nov 2010) MN Senate Fiscal Staff

  7. General Fund Budget Forecast (November 2010) MN Senate Fiscal Staff

  8. Structural BalanceCurrent Revenues compared to Current Spending • Spending exceeds revenues. • One-time solutions used to address ongoing budget gaps. MN Senate Fiscal Staff

  9. November 2010 State Budget ForecastGeneral Fund Spending Increase: FY10-11 to FY12-13dollars in thousands $34,411 MN Senate Fiscal Staff

  10. General Fund Budget Deficit Compared to Projected Spending/Other States • MN’s $6.2 billion deficit for FY 2012-13 is 16% of projected spending ($38.6 billion). • 15 States report deficits for the current year (FY 2011); MN has a positive balance. • At least 27 states report general fund deficits for FY 2012 or FY 2013, or both; a larger number of states are likely to have deficits but projections not available for some. • MN has one of the largest budget deficits in the country (as % of General Fund) MN Senate Fiscal Staff

  11. Minnesota’s Budget Deficit for FY 2012-13 is Large Relative to Other States MN Senate Fiscal Staff

  12. State Budget Structure • Approximately 126 “Funds” established in law (funds may be created by Constitution or Statute). • “All Funds” refers to the roughly 39 funds that support biennial operations. • General Fundis largest fund; required to be balanced, tends to be the focus of budget deliberations and of public-media attention. • Within Funds may be various Accounts, along with Programs, Activities, & lower levels of detail. MN Senate Fiscal Staff

  13. State Budget Structure; All Operating Funds * Adjusting for the K-12 aid payment shift, which moves $1.4 billion of spending from FY2010-11 into FY2012-13, All Funds spending would total 61.1 billion in FY 2010-11 and $63.3 billion in FY 2012-13. November 2010 Forecast MN Senate Fiscal Staff

  14. All Funds Spending by Budget Area$64.7 Billion for FY 2012-13 November 2010 Forecast MN Senate Fiscal Staff

  15. General Fund Spending by Budget Area$38.6 Billion for FY 2012-13 November 2010 Forecast MN Senate Fiscal Staff

  16. Susan Von Mosch Fiscal Analyst Susan.Vonmosch@senate.mn 651-296-0165 Major State Taxes MN Senate Fiscal Staff

  17. Tax Committee Jurisdiction • The Committee on Taxes has jurisdiction over all bills relating to taxes and tax aids and credits. • The committee’s jurisdiction includes: • the budget reserve, • tax increment financing, • fiscal disparities, and • payment in lieu of taxes (PILT) MN Senate Fiscal Staff

  18. State Revenues, FY 2012-13All Funds = $60.2 Billion; General Fund = $32.0 Billion Taxes 60% MN Senate Fiscal Staff

  19. All Funds Revenues, by Type$60.2 Billion for FY 2012-13; $36.1 Billion or 60% from State Taxes November 2010 Forecast MN Senate Fiscal Staff

  20. General Fund State Tax Revenues, by Type$30.0 billion for FY 2012-13 Other 17.6% November 2010 Forecast MN Senate Fiscal Staff

  21. Major State and Local Taxes, FY 2010 Dollars in 000s Source: MN Dept. of Revenue MN Senate Fiscal Staff

  22. MN Senate Fiscal Staff

  23. Property Tax Levies Source: MN Department of Revenue MN Senate Fiscal Staff

  24. Trends in MN Government RevenueMN Price of Government = State and Local Revenue /MN Personal Income MN Senate Fiscal Staff

  25. Dennis Albrecht Fiscal Analyst Dennis.Albrecht@senate.mn 651-296-3817 Health & Human Services MN Senate Fiscal Staff

  26. Health & Human Services Budget & Policy Committee • Department of Human Services • Department of Health • Emergency Medical Services Board • Council on Disability • MH/DD Ombudsperson • Ombudsperson for Families • Health Related Boards MN Senate Fiscal Staff

  27. Health & Human Services All Funds Allocation by Fund MN Senate Fiscal Staff

  28. Health & Human ServicesGeneral Fund Allocations, FY 2012-13 MN Senate Fiscal Staff

  29. Department of Human ServicesGeneral Fund Allocations, FY 2012-13 MN Senate Fiscal Staff

  30. Department of Human ServicesMA Average Monthly Recipients, FY 2012-13 Monthly Average Total: 773,328 MN Senate Fiscal Staff

  31. Department of Human ServicesMA Expenditures, FY 2012-13 MN Senate Fiscal Staff

  32. Health & Human ServicesHealth Care Access Fund • Funds Received Include: • 2% Provider Tax Paid by Medical Providers • 1% Gross Premium Tax on Insurance Premiums • FFP for Administration • Primary Use is for MinnesotaCare Program • Also Used to Fund Health Care Access and Quality Improvement Initiatives MN Senate Fiscal Staff

  33. Department of Human ServicesHealth Care Access Fund, FY 2012-13 MN Senate Fiscal Staff

  34. Department of Human ServicesMinnesota Care • Provides health care services to people who do not have access to affordable health insurance. • Must meet income and program guidelines. • Must pay monthly premium based on income. • 73.4% of enrolled participants have income below 150% of Federal Poverty Guideline. • Approx 118,000 enrolled participants per Month MN Senate Fiscal Staff

  35. Department of Human ServicesMinnesota Care, FY 2012-13 MN Senate Fiscal Staff

  36. Department of Human ServicesChildren & Economic Assistance, FY 2012-13 MN Senate Fiscal Staff

  37. Department of Human ServicesMinnesota Family Investment Plan • Minnesota’s TANF Program • 60-month Lifetime Limit for Cash Assistance • Employment focused program with access to health care, child care, and employment services. • 36,900 Average Monthly Participant Families—Approx 100,400 individuals • Includes Diversionary Work Program MN Senate Fiscal Staff

  38. Department of Human ServicesMinnesota Family Investment Program, FY 2012-13 MN Senate Fiscal Staff

  39. Health & Human Services BudgetOther Agencies • Department of Health • Emergency Medical Services Board • Council on Disability • MH/DD Ombudsperson • Ombudsperson for Families • Health Related Boards MN Senate Fiscal Staff

  40. Department of HealthAll Funds Allocation by Fund MN Senate Fiscal Staff

  41. Other AgenciesGeneral Fund Allocations MN Senate Fiscal Staff

  42. Health Related Boards MN Senate Fiscal Staff

  43. Health Related Boards (Cont’d) MN Senate Fiscal Staff

  44. Higher Education MajaWeidmann Researcher/Fiscal Analyst Maja.Weidmann@senate.mn 651-296-4855 MN Senate Fiscal Staff

  45. Higher EducationDistribution of General Fund, FY 2012-13 2% 13% 43% 44% 98% NOTE: Mayo Medical Foundation appropriation < 1% of total appropriation for higher education MN Senate Fiscal Staff

  46. University of Minnesota U of M FYE Enrollment Twin Cities Campus Tuition • Five Campuses: Twin Cities, Crookston, Duluth, Morris, Rochester • 67,364 Students; 61,984 FYE (2009-2010) • Annual Undergraduate Tuition (Twin Cities campus): $11,094 (2010-2011) MN Senate Fiscal Staff

  47. Minnesota State Colleges and Universities State Universities Colleges Tuition FYE Enrollment • 32 Colleges and Universities (25 two-year colleges, 7 state universities) • 198,494 students, 155, 601 FYE (2009-2010) • Average Tuition (2010-2011): Colleges: $4,478; State Universities: $6,196 MN Senate Fiscal Staff

  48. Office of Higher Education • Financial Aid Services-State Grants and Loans • Licensing and Credentialing of Institutions • Student Data • Tuition Reciprocity Agreements MN Senate Fiscal Staff

  49. Higher Education Facilities Authority • Issue tax-exempt revenue bonds to assist non-profit and public higher education institutions finance construction projects on their campuses • 21 non-profit colleges and universities have utilized this program to construct facilities on their campuses • Authorized to issue up to $1.3 billion in revenue bonds MN Senate Fiscal Staff

  50. Kevin Lundeen Fiscal Analyst Kevin.Lundeen@senate.mn 651-296-2727 State Government Innovation and Veterans Committee MN Senate Fiscal Staff

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