Dayton administration officials say budget plan riddled with unproven assumptions, inaccurate estimates.
Gov. Mark Dayton's administration blew a $1.2 billion hole in the Republican Legislature's proposed budget Tuesday and raised fresh doubts about an orderly path to a budget deal.
Dayton's revenue and budget commissioners sent a strongly worded letter to Republican leaders saying their recently passed plan to erase the state's $5 billion deficit has come up short -- despite GOP insistence the plan is balanced.
"We are seriously concerned that the administration could be presented a budget that is predicated on incomplete information, unsubstantiated assumptions and inaccurate fiscal estimates," said Minnesota Management and Budget Commissioner Jim Schowalter and Revenue Commissioner Myron Frans in a joint letter to legislative leaders.
The two noted that previous governors -- "of all parties" -- had relied on their departments' nonpartisan staff as the official source for fiscal estimates on the impact of proposed bills.
"There are more than $1 billion of questionable items that really need to be nailed down," Schowalter said earlier. "If we book numbers, we need to use conservative numbers so we know what we are doing."
The letter deals a setback to the Republican budget timeline with only six weeks to go in the legislative session. Legislators are nearing a 10-day spring recess, after which they will have less than a month until adjournment. Dayton has said he won't begin negotiating with Republican leaders until their budget assumptions are vetted by administration budget analysts.
Instead, he is pressing Republicans to make another $1 billion in actual cuts from their budget outline. If they are unwilling to do so, he says, that proves his mix of cuts, shifts and tax hikes on high earners is the right path forward.
"They still haven't done the hardest part of it, which is to go that extra $1.2 billion or $1.7 billion," Dayton said in a recent interview. "I want to see that and I want them to face the people of Minnesota and say 'This is all, this is it, this is the whole package and it's balanced and square,' and then everybody can see these effects on people's lives vs. my budget."
Republicans say that administration analysts -- many of whom served in the previous Republican administration -- are so deeply tied to traditional assessments that they cannot accurately calculate savings on innovative programs. Instead, Republicans are relying on analysis from companies that say they have helped other states save money.
"We believe there are significant savings to be found in the reforms that we are proposing, and we think they are good reforms," said Senate Majority Leader Amy Koch, R-Buffalo.
Dayton and DFL legislators have said the new GOP majority booked more than $1 billion in "phony" reductions because they now realize they cannot deliver the all-cuts budget they promised during the campaign.
Dayton's budget and revenue officials noted five instances where savings either were overstated or were totally unproven.
In the most glaring example, House Republicans booked $750 million in savings from federal health care waivers that the letter characterizes as "unobtainable." The GOP proposal requires the DFL governor to petition the Obama administration for an exemption from a program the president strongly supports.
"We expect some waiver relief from the federal government and we believe the governor is in a good position to help us do that," said Sen. David Hann, an Eden Prairie Republican who chairs the Senate Health and Human Services Committee. Dayton has given no indication he would be willing to seek such a waiver.
The commissioners cited another example where Republicans penciled in $133 million through stricter collection of unpaid taxes. But state budget officials appointed by former Republican Gov. Tim Pawlenty had said last year that they were already getting about as much as they could from tax dodgers. They said any more tax revenue would largely be offset by the cost of hiring more auditors.
Republicans also want Dayton to trim up to $300 million, but they don't say from where. The letter characterized this as "unprecedented" and "unworkable."
House Speaker Kurt Zellers, R-Maple Grove, wants to get Dayton's budget analysts together with Republicans' experts to hack out numbers that both sides can agree on in the contested areas.
"This is the hard work," Zellers said.
Schowalter warned against turning budget numbers into a political football game. "Objective things become political and that's not the way we do it in Minnesota," he said.
Republicans noted that there is scant legislative support for Dayton's proposed tax hikes, which he uses to balance his budget.
"So that's a significant hole in the governor's plan," Koch said.
That leaves a long path to travel by the May 23 deadline.
Staff writer Rachel E. Stassen-Berger and University of Minnesota intern McKenzie Martin contributed to this report. Baird Helgeson • 651-222-1288