Filling budget deficit will cost Minnesotans in other ways

The 2008 legislative session ended rather quietly on May 19. The biggest issue we faced was a$935 million budget deficit that forced the Legislature and governor to make serious program cuts and to prioritize spending to balance the budget.

Health and human services took the brunt of the cuts. Compromises were made and we ended up making a $50 million loan to the general fund out of Health Care Access funds.

Nursing homes were spared, receiving a 2 percent cost of living adjustment. Hospitals, however, bore significant cuts as outpatient reimbursement rates were cut by 3 percent and inpatient rates by 3.7 percent for patients using medical assistance. When we went into session in February, payments to hospitals already were almost 12 percent less than they were in 2002. While the new cuts will save our general fund more than $100 million during the next three years, this is money our hospitals must make up through higher prices to the rest of their patient population, resulting in higher insurance premiums. I know what a blow this will be to our medical community in Duluth. I will work to ensure that the phase-out in the hospital cuts remains a priority over the next few sessions.

City and county government also will feel the pinch with a three-year levy limit placed on local budgets. Levy limits provide an artificial cap on property tax increases. Once the limits are removed, they eventually will haunt local elected officials and result in serious property tax increases to homeowners and businesses. We as state leaders should partner with local officials, and I fear that with levy limits, we have fractured that relationship.

We need a long-term budget strategy and structural changes to benefit our state and the people we serve. While we were able to balance the budget, make some strides for schools and nursing homes and provide some meaningful property tax relief through Local Government Aid, we did so at a cost that we will have to face in future years.

Sen. Yvonne Prettner Solon represents Duluth in the Minnesota Senate.