Fiscal fight: DFLers say Pawlenty agencies are gumming up the budget process

As DFL committee chairs in the Legislature scramble to compile the details of their budget proposals, a back-channel political controversy has erupted over the snail’s pace at which Pawlenty administration agencies are providing them with the fiscal notes they need in order to determine the dollars and cents implications of policy proposals.

The problem is most acute in the area of health and human services, which constitutes more than one-third of the state’s general fund budget. It’s the second-largest sector in the budget after education, and the one that Gov. Tim Pawlenty has targeted for the deepest cuts in the current biennium and in 2012-13.

With deadlines looming, "I’m just tearing my hair out," said Sen. Linda Berglin (DFL-Minneapolis) (pictured), the chair of the Senate Health and Human Services Budget Division. "We don’t know what bills we’ll have on the agenda from one day to the next. I put bills on the agenda hoping to have the fiscal notes in time, but often we don’t. So I’m constantly putting bills on [the committee agenda] and then taking them off. It’s limiting our ability to deal with the bills we need to get through. At this point, I’m not sure how we get there from here."

According to Berglin’s office, some 43 fiscal notes have been delivered to her committee so far, while another 48 are listed as "in progress" or awaiting sign-off from the Department of Management and Budget and more than a dozen are "inactive."

The problem has been exacerbated in some cases, Berglin added, by fiscal notes that are done incorrectly or that fail to supply all the requested information. "I’ve written letters to [agencies] asking when certain fiscal note requests would be done, and I get no answer," she said. "When I’ve asked them orally, I sometimes get them only to find out they’re not done right."

"I’ve never seen delays like this," said Berglin’s House counterpart, nine-term Rep. Thomas Huntley (DFL-Duluth), who heads the House Health Care and Human Services Finance Division. "They’re very slow. I think they’re understaffed." Huntley pointed to a number of fiscal note requests that were submitted by his office in early February and still have not been supplied.

"We have to vote on my [omnibus HHS finance] bill by April 16," he noted, "and that means we need to be done three or four days before that so the public has a chance to see it before we vote." In view of the upcoming Easter and Passover breaks in the session, that leaves just a handful of days to finish the work.

Health care-related fiscal notes involve contributions from three Pawlenty administration agencies: the Department of Health, the Department of Human Services, and the Department of Management and Budget. Legislative insiders grappling with the problem say that the delays are mainly caused by the Department of Human Services, though they also criticize Management and Budget officials for their oversight of the process. They also say that during the current session, their requests have frequently been put off with the explanation that agency analysts were busy dealing with the governor’s budget requests.

Nearly a month ago, on March 5, Senate Finance Committee chair Dick Cohen (DFL-St. Paul) sent a letter about the delays to Management and Budget Commissioner Tom Hanson. "The timeliness of fiscal note completion has become an increasing concern over the past several legislative sessions, particularly for human services," Cohen wrote. "Of particular concern is the tendency that has evolved over time for state agencies to prioritize the analytical and fiscal note needs of the Executive over those of the Legislature. There is nothing in [the relevant Minnesota statute] or the established fiscal note policies and procedures that provides for deferring legislative requests until after Executive demands have been completed, nor should there be."

Cohen said he has not received any response to that letter. Along with numerous other DFL members and staffers, he suspects there may be a political dimension to the health and human services fiscal note slowdown. There’s no question that the HHS budget is "extremely complicated," Cohen said–in view of the complex formulae involved, and the additional burden this year of decoding the requirements of the federal stimulus bill–but "human services is a political flashpoint. And the question is whether they’re dragging their feet on these requests. This has been an ongoing problem. It’s not just confined to this session."

"I have no idea" whether the slowdown is partly political, said Berglin, who paused before adding: "Originally I thought the governor’s budget was taking up their time. But the governor’s budget is done now, and we’re still not getting timely responses."

Huntley disagrees with his colleagues about the role of politics in the logjam. "I think they’re just overworked," he said, "and trying to figure out the stimulus bill and the strings attached to it. And DHS has had some staff turnover that has made things more difficult for them."

Dick Cohen doesn’t entirely buy that. "The problem predates the new personnel in the Department of Human Services," he said.

In response to PIM’s query, Curt Yoakum of the Department of Management and Budget emailed this statement:

"Like most years, committee deadlines mean that fiscal notes are in high demand. MMB and other state agencies are continuing to respond to the 1,800 agency fiscal note requests that have been requested. The health and human services area is especially complex, with interactions between still undefined stimulus bill requirements making difficult estimates even harder. On average, agencies have completed their fiscal notes in nine days. Human Services notes average 13 days. The problems cited are simply a workflow issue, with lots of work being routed to a few people. It will get done and we’re all working to be sure that the legislature gets the information they need to put together this year’s budget."

Whether or not the slowdown is political, said one human services legislative staffer, the fallout certainly is political: "You’ve got Republicans around here saying, ‘Why isn’t the DFL coming forth with its budget?’ Well, the answer in human services is that we can’t get anything fiscal-noted. You can’t do a budget until you have numbers."