Pawlenty’s $1.2 billion in cuts are really $700 million in cuts

Much has already been made of the $387 million asterisk in Gov. Tim Pawlenty‘s supplemental budget, which reflects nearly $400 million in extended federal stimulus dollars that Pawlenty is counting on to fill 30 percent of the state’s $1.2 billion deficit for the remainder of the 2010-11 biennium.

(Incidentally, there has been some semantic fussing and snarling by the administration this week over whether the funds arose from the federal stimulus package that Pawlenty has relentlessly panned during his 2012 presidential campaign travels around the country. It’s our understanding that those funds are indeed a function of a proposed two-quarter extension of a higher FMAP match contained in the 2009 stimulus legislation.)

It turns out that, on top of that $387 million wild card, there’s another $120 million in one-time moneys in the governor’s budget solution. Generally speaking, these dollars are transfers from non-general fund sources to the general fund for budget-balancing purposes. “In some cases,” a legislative staffer explains on background, “they may be unspent balances in certain funds that are being grabbed. In others cases, the governor’s proposal reduces administrative spending that’s being done out of non-general fund accounts by 3 percent. Then he takes that savings and transfers it to the general fund.”

The two biggest sources of the $120 million are:

1) the Health Care Access Fund, which funds MinnesotaCare (slightly more than $48 million);

2) the Douglas J. Johnson Fund, a dedicated pool of money derived from taconite taxes that’s intended to be spent on Iron Range economic development ($30 million);

There’s a budget-sector breakout of the $120 million in one-time moneys in this document.

So in the end, it appears, Pawlenty failed to deliver on the $1.2 billion in permanent budget cuts that he and other administration officials promised in the run-up to the release of the governor’s supplemental budget. The real bottom line in TP’s budget-cutting efforts is $700 million or so.