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State budget talks at the capitol begin as Minnesota stares down deficit in future

No matter what the final details of Minnesota's next state budget look like, there will most certainly be spending cuts.

Legislative leaders in both chambers released their budget targets over the last week to kick-start end-of-session negotiations, after Gov. Tim Walz released a revised budget plan of his own to account for the latest economic forecast showing a $6 billion deficit in future years if the legislature does not act wisely this session.   

They have different approaches in the divided legislature of how Minnesota should rein in spending, but all plans include reductions. Speaker Lisa Demuth, R-Cold Spring, said any tax or fee increases are nonstarters for Republicans, who must work with DFL lawmakers in a tied House to pass anything.

"We can't do anything but look at ways to right-size government," Demuth said on Wednesday after a meeting with Walz and legislative leaders.

Targets don't have any details, only the top line numbers of how much additional funding on top of existing appropriations each budget area — education, public safety, transportation, health, judiciary and more — have to work with.

Some places see a modest increase. Others are neutral or face cuts.

"If Democrats were setting the targets on our own, these targets would look very different because we would've asked the wealthy and corporations to pay their fair share in order to make additional needed investments in public education and affordable health care," former Speaker Melissa Hortman, DFL-Brooklyn Park, said of the joint House targets Monday.

Senate Majority Leader Erin Murphy, DFL-Saint Paul, said her caucus has had a "good grounding" in terms of session expectations, since proposals with a steep price tag will likely be left on the cutting room floor this year. 

She's also concerned about what federal spending cuts could mean for Minnesota, since reductions to Medicaid or education would impact the state budget. 

"We're in these chairs right now at a time when we have economic uncertainty," she said. "Our values are the same, so we have to weather the uncertainty and do the best job we can for the people of Minnesota."

Governor's revised budget includes trims education spending

Included in Walz's budget proposal are reductions or the elimination of certain education funding for K-12 schools. 

The Senate Education Finance committee on Wednesday got feedback on his ideas, including some pushback. School districts large and small are facing their own budget shortfalls and will have to make their own cuts. 

Walz's plan would eliminate "nonpublic pupil aid," which is money supporting textbooks and health services at private schools, trim funds for charter schools and shut down a program that provides additional resources to support professional development and performance pay for teachers. 

He also proposes cutting back on how much the state reimburses schools for transportation for students with disabilities.

"The loss of approximately $400,000 in special education [funds] and [charter schools facilities funding] would force us to eliminate the equivalent of five general education teachers, positions that are critical to maintaining the high standards of education our students deserve," Nathan Flansburg, superintendent of the PACT Charter School, said. 

Republicans on the panel called the plan "a joke" and a "war against nonpublic schools." But Walz defended it on Wednesday and said he's protecting important programs while aiming to slow the growth of some of the biggest drivers of spending that could trigger a future deficit.

"I've spent my entire life in education. I've advocated my entire career around it. I'm not going to do things that take away from the services that we need to provide," Walz told reporters. "But I think realistically, we have to understand we're not in a position with these cost drivers to be able to increase the spending that's being asked where we need to slow it."

Per-student state funding is indexed at the rate of inflation, thanks to a law passed two years ago. Walz also asks to fully support the universal school meals program that offers all students free breakfast and lunch by covering the costs not paid for by the federal government.

Walz's ideas are not set in stone; he will need lawmaker buy-in for them to pass. 

The House doesn't make any cuts to education in its target for the next two-year budget or one after, "planning years," lawmakers consider when making spending decisions. 

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