Wednesday, March 23, 2011

Forced Unallotment?

Last Friday, Minority Leader Paul Thissen (DFL - Richfield) implied that the GOP was planning more "choose your own cut" style budgeting, which would set a target and give Governor Dayton the authority to make his own cuts. This was the same approach adopted by the Republican in their first budget cutting bill, HF130. Of course, this is also one of the reasons that the Governor cited for vetoing HF130, arguing that this approach was unconstitutional.

As the major budget bills have rolled out this week, we haven't exactly seen Thissen's predictions come to fruition. However, there's another strategy that seems to be emerging - forced unallotment.

Many of the "reform" provisions in the GOP budget bills have highly speculative savings figures, so speculative that nonpartisan researchers cannot place a dollar figure on the savings. Undaunted, the GOP has simply put their own estimate on the cost savings where a fiscal note is unavailable or where it disagrees with their rosy projections. For example, the State Government Operations omnibus bill books $133 million in savings from "tax compliance" when nonpartisan researchers can't quantify the impact on the budget.

There are also places where the GOP simply asserts things will happen. For example, the House Health and Human Services omnibus bill books $300 million in savings assuming that the federal government will grant a waiver to Minnesota with no evidence that assumption will come true.

You have to take a long view of this budget battle. These first efforts at budgeting will be vetoed and then we can start the real process of crafting a compromise. But the Dayton administration needs to be very careful to push back hard against these "savings." It will be expedient to go along with the rosy assumptions in order to make a compromise happen, but very dangerous in the long run. Many of these "reforms" require executive action, so if they fail to save money Republicans can simply blame Dayton's commissioners for dragging their heels.

Even worse, once Dayton signs the budget it becomes his problem if spending outpaces revenue. He will have no leverage to push for revenue increases. If the "savings" don't materialize during the biennium, Republicans can either push for more of their own cuts or do nothing and force Dayton to balance the budget with his cuts.

While Tim Pawlenty gleefully wielded unallotment as a weapon, Mark Dayton would be stuck with unallotment should the fuzzy reform savings of the GOP prove to be illusory. This is why the final compromise needs solid nonpartisan fiscal analysis to back its assumptions.

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