Dayton says GOP budget plan pulls savings 'out of thin air'

As conference committees started meeting this week on Republican budget bills, the dispute between Gov. Mark Dayton and GOP legislative leaders ratcheted up a notch.

Dayton is criticizing Republicans for what he says is pulling budget savings "out of thin air." Republicans argue that some of their ideas will save more than fiscal analysts are projecting.

For months, Republican lawmakers have called Dayton's budget plan a job killer, out of touch, and lacking the change needed to make Minnesota competitive.

Now, Dayton is striking back. He said the budget plan put forward by House Republicans is $1.2 billion out of balance and the Senate GOP plan is $1.1 billion out of whack. Dayton said his plan is based on solid fiscal analysis and the Republican plans aren't.

"If they're speaking Greek and I'm speaking Latin, we're never going to communicate," Dayton said.

Dayton said the GOP plan relies on hundreds of millions of dollars in savings from a federal health care waiver that isn't guaranteed. He also said the Republican plan counts increased tax collections that state fiscal analysts have not confirmed. The problem, Dayton said, is the state's two-year budget could be significantly out of balance if those savings never materialize.

Dayton is a proposing a budget plan that increases taxes on Minnesota's top earners to erase a $5 billion budget deficit. Republicans insist they can balance the budget without raising taxes.

"What I think they're finding that coming up with $5 billion in cuts and no revenues is extremely difficult and it's going to have extremely painful results on the real lives of real Minnesotans, and they're trying to avoid some of those harsh realities by coming up with fictitious numbers," Dayton said. "It's just not responsible."

The disagreement is becoming a game of fiscal chicken between Dayton and Republican leaders.

Dayton's strategy is to show the public that Republicans would actually have to cut deeply into K12 schools and Health and Human Services programs to erase the deficit without a tax increase.

Republicans are working to show that projected growth in spending can be curtailed without any real harm to core state programs. Republicans don't appear to be backing off of their budget numbers ... yet.

Republican Senate Majority Leader Amy Koch told reporters that the GOP is willing to work with Dayton to come up with numbers that they can both agree on, but she says Republicans are adamant that their ideas will save more than what's been projected.

"There are some numbers issues in there that we will have to resolve before we can finish a budget deal. There's some recognition of that. I think the biggest point of discussion has to be the idea of the Health and Human Services budget and what we're going to do with federal waivers."

Those federal waivers are a big part of the House and Senate budget. They're booking up to $750 million by asking the federal government to allow the state to change how it provides health care to poor people through Medicaid. Republican House Speaker Kurt Zellers says the waiver plan is staying in the bill for now.

"Until someone says, 'No, we're not doing the waiver.' Either it's the federal government that says no to us or the governor says no to us. We're going to proceed that we have great programs that we should get our money back for and spend [on] here in Minnesota versus, as Senate Hann says, folks out on the Potomac thinking they know best for Minnesota."

But Dayton said it's unwise to count on any savings from a federal waiver because he doesn't think it will ever be approved. He also said other governors have told him that they've been waiting several years on similar requests. He says he's willing to work with Republicans on a waiver request but says the savings shouldn't be included in the budget.

While Dayton and GOP legislative leaders are arguing over the biggest parts of the state budget, they did reach agreement on one relatively tiny part -- the agriculture budget bill. Dayton told MPR News that he'll sign the bill. which accounts for less than 1 percent of the state's total budget.

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