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Debate over health, human services budget may be most contentious
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DFL Sen. Linda Berglin proposes to keep most of the state's spending on health and welfare programs intact, while raising the cigarette tax $1 per pack to help make up the state's budget deficit. (MPR Photo/Tom Scheck)
The Senate Finance Committee has approved a health and human services bill that would restore $500 million in cuts that Gov. Pawlenty and House Republicans proposed for nursing homes, daycare and health insurance for the low income. The governor and House Republicans say the Senate plan is unacceptable since it raises taxes to offset the proposed cuts. But Senate DFLers say their plan would help the state's most vulnerable during an economic downturn.

St. Paul, Minn. — Sen. Linda Berglin, DFL-Minneapolis, says her plan would restore some of the proposed cuts to several health insurance programs. Berglin says it's unacceptable that Gov. Pawlenty and House Republians want to cut 68,000 people from state-subsidized health insurance. Her bill would also restore proposed cuts to nursing homes and subsidized daycare for low-income Minnesotans.

"I believe this is a responsible bill. It is a bill worth fighting for," says Berglin. "It is a bill that will preserve the safety net for the people of Minnesota, at a time when many people have despair as to whether Minnesota would be able to preserve the safety net during this budget period."

Berglin is using a $1-per-pack increase in the cigarette tax to make up the difference between her plan and the Republican alternative. She also says the state can save money if it requires Minnesota to stop paying to treat certain conditions through the state-sponsored programs. Berglin says, for instance, treatments for the common cold and lower back pain aren't effective and are unnecessary.

At some point in the session here, my friends on the other side of the political aisle are going figure out that we're not raising taxes.
- Gov. Tim Pawlenty

House Republicans and Gov. Pawlenty say Minnesota doesn't have the money to continue to pay for certain programs in health and human services. They say the state's $4.2 billion deficit is forcing them to slow the rapid rate of growth in health and human services. Pawlenty said Berglin and others who are proposing tax increases are being unrealistic.

"At some point in the session here, my friends on the other side of the political aisle are going figure out that we're not raising taxes, and we're going to have to live within the $28 billion or so that we have available to spend," Pawlenty says.

Pawlenty says Minnesota is one of the more generous states when it comes to health and human services programs. Berglin notes several House Republicans have proposed the cigarette tax increase to pay for eliminating the health care provider tax on hospitals, clinics and doctors, often referred to as the "sick tax."

The House author of that proposal says it's a revenue-neutral measure. He says he'll pull the bill if the Senate doesn't agree to swap the cigarette tax for the provider tax. Berglin believes the money should go to what she calls the true "sick tax."

"Those circumstances should be for elderly people in nursing homes, for people who rely on us for services. For people relying on us for prescription drugs. For people relying on us to get care when they're mentally ill, so they don't go to prison or a regional treatment center," Berglin says. "I think those are priority items that come before any of the reasons that the Republicans in the House and Senate should raise cigarette taxes."

Berglin also offers different proposals for the so-called welfare-to-work program. She says able-bodied adults should enter into a work diversion program before getting any cash assistance. Pawlenty and House Republicans say all welfare recipients should find a job before getting any cash assistance.

The differences between the House and Senate proposals have some observers thinking it could be the most contentious debate when the two sides begin negotiating their budget differences.

"It's sort of a real flashpoint for the session," says Rep. Fran Bradley, R-Rochester, who chairs the House Health and Human Services Finance Committee. "Because it looks like about half of the tax increases that are proposed by the Senate are going into health and human services programs, so you obviously have a huge difference."

Bradley says House and Senate leadership will need to reach an agreement on how much the state should spend on health and human services over the next two years. Both the full House and Senate are scheduled to take up their health and human services budget bills later this week.

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