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State's social services may see changes
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Gov.-elect Tim Pawlenty says Minnesota will not become a cold Mississippi. He says offering the same programs as Wisconsin will not put the state in the "dark ages." (MPR photo/Tom Scheck)
The Pawlenty administration and lawmakers will be looking at services for the poor, elderly and sick as they consider ways to balance the state's budget. Health and human services is the second largest portion of the budget and is considered one of the fastest growing areas of state spending. While some lawmakers say the state's most vulnerable residents could be harmed by budget cuts, Pawlenty and others say Minnesota can make some cuts and some changes that will protect those who need help the most.

St. Paul, Minn. — The key question for Gov.-elect Tim Pawlenty and state lawmakers is how do they want to care for the state's underprivileged? Should they offer services that are better than most other states, or more on par with the rest of the country? Pawlenty says the state can cut spending for social service programs and still maintain Minnesota's quality of life.

"There's a lot of hysteria breaking out particularly in the news media about the impact of these cuts," Pawlenty said. "I think slowing down the rate of growth of government in times of recession and layoffs and the rest is a reasonable thing to do. And approaching the Wisconsin standard for social services for example is not going back to the dark ages." Pawlenty says the looming budget deficit gives him the chance to significantly change the way the state provides welfare, services for the elderly and health care for low income people.

Minnesota spent $6.1 billion of it's budget during this two-year cycle on health and human services. The federal government kicked in an additional $7 billion, making the overall health and human services budget $13.1 billion.

Advocates for the poor and underprivileged say they're concerned that Pawlenty and House Republicans will try to roll back welfare benefits and health care for poor people. Those health care programs along with long-term care for the elderly and disabled are paid for by what's known as General Assistance Medical Care. It takes up the largest part of the health and human services budget and is growing much faster than inflation. House Speaker Steve Sviggum, R-Kenyon, says he wants to make sure help is provided to those who need it but he isn't prepared to go much farther.

"We need to focus Health and Human Services on where it ought be," Sviggum said. "To people who can't take care of themselves; the developmentally disabled, the mentally ill and the elderly."

Jim Koppel, the executive director of the Minnesota Children's Defense Fund, says he's concerned the budget crisis will decimate social serviced programs.

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Image Republican House Speaker Steve Sviggum

"We are going to put our families and many other citizens at a disadvantage," Koppel said. "We're going to be looking more like some of the states that we would never want to move to and raise our children in and less like the Minnesota that we've known."

Koppel says the only reasonable way lawmakers can deal with the large budget deficit is to reject Pawlenty's 'no-new-taxes' pledge.

"My fear is that we're going to see families, and when I talk about families I talk about children and their parents or grandparents, whoever is raising them," Koppel said. "That those families are going to be told this is really up to you to provide. You know, you had these children, do the job."

The Pawlenty administration says the cuts it's contemplating would not have the dramatic impact Koppel fears. Health and Human Services Commissioner-designee Kevin Goodno says he's considering a plan that would give each county a block grant to pay for programs. He says that would allow county officials to provide social services in the best way they see fit. Goodno, a former Republican House member, says the state can't continue to provide an unlimited amount of services. He says the administration may propose cutting back eligibility requirements for medical assistance and welfare.

"We want to engage people and want people to be part of the solution because there's going to be change," Goodno said. "The $4 billion-plus shortfall dictates that there will be change so you can either be part of the solution or you can sit back and let what happens happen to you..."

DFL Senate Majority Leader John Hottinger says he's cautious about rolling back services, especially in an economic downturn. He says more people are going to need help with child care, health insurance and welfare.

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Image DFL Senate Majority Leader John Hottinger says he's concerned about cuts to HHS.

"It becomes a real test of our commitment and fiduciary commitment to the people of this state," Hottinger said. "Are we going to abandon those who are the first ones laid off because they were the last one's hired who are working hard to get off welfare but they just don't have a job. They just don't have a job."

Long term care for the elderly and disabled is an espcially difficult problem. It consumes roughly two-thirds of the state's medical assistance budget. The cost is expected to go even higher as baby boomers retire over the next two decades.

Rick Carter, with CareProviders of Minnesota, says nursing homes depend on the state for funding. He says the Legislature requires that nursing homes charge a set fee for all residents regardless of whether they or the taxpayers pay the bills. He says that means nursing homes can't raise rates if they're financially strapped.

"We can't levy on the property taxes," Carter said,. "We can't charge more to our other patients and residents like the University of Minnesota can. What do I mean by that? If the University of Minnesota doesn't feel that they get the funding they feel is appropriate or neccessary they can raise tuition. We can't do that."

Carter says Minnesota is one of two states that doesn't allow nursing homes to charge higher rates for so-called private pay residents. Some lawmakers say they may consider changing that rule in the upcoming session but DFL House Minority Leader Matt Entenza says the system has to treat everyone fairly.

"We do need to look at some areas where there may be some reasonable costs assesed to private pay patients who've got the ability to pay," Entenza said. "Maybe what we should look at is a sliding fee type system but the bottom line is the quality of care has to be equal. We can't have people doing relatively well in nursing homes while other people are out in the hallways."

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Image Health and Human Services Commissioner-designee Kevin Goodno says changes will occur to the HHS budget.

Nursing home associations say they spend too much time and money meeting state and federal regulations. The Pawlenty administration says it will ask the federal government to loosen regulations on long-term care facilities.

Speaker Sviggum says less red tape would allow nursing home to dedicate more money to patient care.

"I met with the nursing home folks and talked about rules and regulations," Sviggum said. "We can change that will help them if not on the forefront get more revenues allow the revenues that they have right now to be better used for patient care as opposed to inefficiently or inappropriately being used."

One other proposed change in the social service sector could be privatizing services. Tim Pawlenty says he'd like the state's non-profits to provide more of the social services government now administers. Pawlenty says many charities are more efficient than government in helping lower income Minnesotans.

"You might see a scenario where we offer grant money to them directly or tax credits to their donors to try to get more resources to social service agencies and charitable non-profit social service agencies," Pawlenty said. "In lieu of the government doing it directly because not only can we potentially save some money but they provide the service better and help people more effectively."

Pawlenty and others in his administration weren't specific about what exactly could be privatized except to say a number of services that directly serve people are on the table.

Some non-profits say they'd be happy to play a greater role but aren't sure if they can provide the same amount of services currently provided. John Schurhammer is the associate executive director of the Olmsted County United Way. He says the United Ways in the larger areas of the state would be fairly well equipped to take on Pawlenty's challenge. He says, however, that it could be difficult logistically for all non-profits to start handling state services.

"If they were looking to do it all over the state I doubt very much the United Ways would be able to do it alone," Schurhammer said. "Somewhere along the line there would have to be some sort of infrastructure set up to make that happen."

Pawlenty says he's also lobbying the federal government to increase funding for medical assistance but he said he's crafting his budget with the expectation that the state is on its own.

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