Reform is hard to budget
- Blog Post by: Lori Sturdevant
- February 1, 2013 - 1:58 PM
Blushing at lavish public praise from her boss, state Human Services Commissioner Lucinda Jesson proudly announced Friday a new approach to state health care contracts that promises a $90 million savings for taxpayers over the next three years.
Her boss, Gov. Mark Dayton, said the change will also mean better health care for 100,000 low-income Minnesotans, as fewer of them turn to emergency rooms for primary care.
Can that savings be applied to balancing the state budget, which shows a $1.1 billion deficit in 2014-15? Not yet, Jesson said. Minnesota's change from fee-for-service to an accountable care approach for a large population of low-income families with children will be the first in the country. "We need a track record in order to do that," she said.
Much the same goes for a number of cost-saving strategies throughout state government. Ideas for consolidating back-office operations, streamlining procurement practices, tightening anti-fraud measures and more have either been implemented in the last two years or are works in progress. Both Republicans and DFLers can take credit for the changes.
But new service-delivery approaches often cannot be counted toward the elimination of a future deficit. It takes a look backward to see their worth.
Here's a telling look: In November 2010, the forecast for state spending in 2014-15 was $39.7 billion without considering inflation, or $42.5 billion with anticipated inflation tallied. The November 2012 spending forecast for the same period was $36.9 billion, or $37.7 billion with inflation. Dayton's proposed budget would take it up to $37.9 billion.
That's $1.8 billion lower than the spending track the state was on at the start of his term. Outright spending cuts enacted in 2011 were part of that change, but so was redesign.
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