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Hospitals, others line up to criticize plans for more cuts
March 17, 2004

St. Paul, Minn. — (AP) For the second straight year, Gov. Tim Pawlenty is looking to health and welfare programs for the cash to fill the largest holes in his budget. But hospital officials and advocates for the poor told senators on Wednesday his latest proposal would weaken their programs to the breaking point. "If a space alien were to come down to earth to find out how to kill off faith-based social service organizations - this is how to do it: Each year, reduce funding to make it ever more impossible to retain dedicated employees to provide services for people in need," said Mark Peterson, president of Lutheran Social Services of Minnesota.

He said his group has already cut a Foster Grandparents program, closed an emergency shelter for children in the Brainerd area and suspended an emergency shelter in St. Paul.

A recent budget forecast puts the state $160 million in the hole for the two-year budget that ends in 2005.

To fill the gap, Pawlenty proposes to find $40 million from Department of Human Services programs, mostly by cutting payments to hospitals, nursing homes and pharmacies. Another $70 million would come from a fund that pays for the MinnesotaCare program, which subsidizes health insurance for low-income working people. The money ultimately comes from a 2 percent tax on health care services.

"Why should health care account for 70 percent of the budget solution?" Mary Klimp, chief executive of New Prague's Queen of Peace Hospital, asked members of the Senate Health, Human Services and Corrections Committee.

Speaking for the Minnesota Hospital Association, she said one in four hospitals in the state are spending more than they earn, putting them at risk of closure already.

Others spoke against a part of the plan that would cut the amount of time welfare recipients can spend in college or other training programs from two years to one. They'd still have to work at least 20 hours per week - a new requirement Pawlenty sought last year.

"We know that education is the way that we can help a lot of people really achieve the goal of transitioning from welfare to work," said Karen Kingsley of the Affirmative Options Coalition.

About 5 percent of welfare recipients are in training programs, but Kingsley said few of the programs can be completed in 12 months, particularly if someone is required to work 20 hours per week.

The proposed cuts pale in comparison to those enacted last year, when Pawlenty and House Republicans prevailed with a plan to cut nearly $1 billion out of health and human services spending. Pawlenty and department officials note that even with the cuts, spending on the programs has continued to rise, largely because of the increasing costs of health care services.

Pawlenty's budget plans have drawn fire from both chambers of the Legislature. Responding to testimony Wednesday, Republican Sen. Paul Koering of Fort Ripley questioned the wisdom of additional social service cuts.

"I'm just quite upset today hearing this stuff," he said. "Cutting this stuff is just really unfortunate. It costs all of us in the future, not only monetarily but also societally."

Republican House Speaker Steve Sviggum has said the House budget will reject most of the health cuts, likely filling the gap with revenue from new gambling proposals.

Pawlenty's budget isn't all cuts. He would also:

-Restore state payments for diabetes test strips for people on the MinnesotaCare state-subsidized health insurance program for working people.

-Improve access to some mental health services.

-Increase funding for an HIV/AIDS program.

-Beef up investigations into people defrauding MinnesotaCare by falsely claiming to be eligible.

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