Local officials react to House GOP budget plan

By RON LARSEN

Journal Staff Writer

NEW ULM--While the House Republican plan for reducing the bite on local government aid is considered "a step in the right direction," area city officials are holding tough for a bigger reduction.

Meanwhile, the House GOP's planned restoration of $70 million for nursing homes, services for the disabled and senior programs is receiving a more enthusiastic response from local administrators.

While Gov. Tim Pawlenty has proposed cutting the $1 billion-plus aid that cities get by $435 million, the House's GOP majority is proposing a cut in that reduction of $91 million, making the net reduction $344 million in LGA and Market Value Homestead Credits.

"Anything is an improvement, but the Coalition of Greater Minnesota Cities has a 'fair cut' proposal out there also which is probably even better in the big scheme of things for us," City Manager Brian Gramentz said.

The CGMC proposal calls for a total cut of $192 million and most of it--$163 million--would come from reduction in the reimbursement cities receive for property owners' homestead exemptions.

The coalition says the reductions in the fair-cut proposal "are primarily made in the Market Value Credit (MVC) program in order to help distribute the cuts more evenly across cities. Most of the governor's cuts are made to local government aid which is distributed to cities with lower tax wealth and higher needs.

The CGMC proposal is in bill form in both the House and the Senate. Chief author in the Senate is Sen. Keith Langseth, DFL-Glyndon, member of the Senate Finance Committee, and the House version is chief-authored by Rep. Dan Dorman, R-Albert Lea.

The House Republican budget plan was "extremely good news" to Mary Krueger, administrator at St. John Lutheran Home in Springfield because she said it would put $33 million more into nursing home rates than Pawlenty's plan.

"The message we're trying to send to our legislators is that nursing home funding has been extremely tight the past few years," Krueger said. "We've already done a lot of trimming. Most nursing homes already run on lean budgets. Seventy percent of our budget is wages and benefits."

It would be difficult to trim anything more in such a labor-intensive industry, according to Krueger.

If Pawlenty's budget plan (4 percent cut) becomes effective July 1, 2003, St. John Home would have to slice another $146,000 from its budget, something Krueger hopes to avoid. She has already asked her staff for input on money-saving ideas.

Krueger believes Pawlenty's nursing home cut list that includes slicing Medical Assistance Co-Pay for medical eligibles, hold-payment reductions and elimination of the Day 31 Enhancement are designed to get people thinking and talking about cuts. She doesn't anticipate deciding on what programs or departments would be on the chopping block at until later this month.

Carli Lindemann, administrator at Oak Hills Living Center, said the Republican proposal is an improvement over Gov. Pawlenty's plan, as far as nursing home funding is concerned, but it still a "less than rosey picture" for nursing homes.

"We're very appreciative to our local legislators for listening to our concerns," said Lindemann. "But it looks like a rate freeze is about the best we can expect, which is better than a four percent rate cut that Governor Pawlenty had proposed."

While the House plan restores the rate cuts for reimbursing nursing homes, it leaves some other funding cuts for nursing homes in Pawlenty's plan, said Lindemann.

"It's still going to be tough for nursing homes throughout the state," she said. "But under the current circumstances, we appreciate anything the state can do for us."

Lindemann had testified before both the House and Senate Health and Human Services committees on the impact of the proposed budget on nursing homes. She said it helped get her message across, but it was "overwhelming" to see how many different services were hit by budget constraints.

"When I testified before the Senate committee, there were 40 different groups testifying, and at the House there were 80 groups. It was overwhelming to see all the cuts that were being made," said Lindemann. "I don't think the average person realizes how many groups are being affected because they aren't involved with many of them."

Journal Editor Kevin Sweeney and Staff Writer Fritz Busch contributed to this story.