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Unallotment Will Impact Many: Energy and Agriculture Are Not Exempt

June 26, 2009

With large cuts in government aid for human services and education, Minnesota will certainly be impacted by Governor Tim Pawlenty’s budget-balancing unallotment method if his proposed budget cuts are finalized on July 1. While not yet clearly identified, budget cuts are expected for agricultural and environmental legislation as well.

Minnesotans have become familiar with the somewhat uncommon practice of unallotment over the last few years as this is Pawlenty’s third use of this power in six years. In perspective, Pawlenty is only the third recorded Minnesota governor to exercise this power in the last four decades. As governor, unallotment gives Pawlenty power to reduce government spending to avoid an anticipated budget deficit with virtually no limitations from either the legislative or judicial branches. Minnesota law requires the budget be balanced every biennium and unallotment is one method of doing so.
At a press conference on Tuesday, June 16 Pawlenty announced his budget cuts: $200 million in local aid for cities and townships, $100 million in local aid for counties, $236 million from human services, $100 million in higher education, $33 million in state agency operating budgets and $1.77 billion deferred from K-12 education. Prior to finalizing the budget Pawlenty must meet with financial advisors from the state.

The Minnesota Department of Agriculture may have sidestepped some of the negative impacts of unallotment through budgeting. According to the MDA’s projected biennium budget released in January they will have a fund reduction of $1.6 million from the 2008-09 biennium. “The magnitude of the projected budget shortfall and the desire to protect core MDA functions necessitates reducing or eliminating some functions,” said the budget report. For example, the MDA’s aquaculture program, plant pest survey work and other biocontrol efforts will go by the wayside. According to an article in The Bemidji Pioneer despite planning ahead, Minnesota agriculture is expected to receive an eight percent budget cut due to unallotment.

With direct budget cuts from the University of Minnesota as well as MnSCU (Minnesota State Colleges and Universities), appropriations legislated for agricultural research developments like HF 1446, which would appropriate $53,175,000 in 2010 and $52,175,000 in 2011 to “expand agricultural research and extension activities” at the U, could also be put on the chopping block. 

While it’s still too early to determine the direct impact of unallotment on energy and agriculture projects, loss of Minnesota jobs is expected. “There certainly will be layoffs, but we can’t quantify that,” said Pawlenty in his June 16 press conference. According to a Minnesota Public Radio article, one state official said at least 3,150 jobs will be lost with the possibility of thousands more.

In Commissioner of Finance Tom K. Hanson’s advisory notice to Pawlenty, suggestions were made to leave only a few sectors exempt from unallotment: public safety, military and veterans affairs, corrections, State Operated Services and the Minnesota Sex Offender Program within the Department of Human Services. Pawlenty also announced any county with a population of 5,000 or less would be exempt from these budget cuts.

To voice your opinion on the unallotment before it is finalized on July 1, email Pawlenty at: tim.pawlenty@state.mn.us.

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