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Private Consultants Trimming Minnesota Budget

by KRISTEN DE PENA | December 12, 2011

The Minnesota government shutdown stalled business, disrupted the lives of citizens and state employees alike, and created a less than favorable impression of government competency. After the record-setting nineteen-day closure, lawmakers vowed to make sure that Minnesotans never experience another government shutdown. To that end, Minnesota lawmakers are bringing in private consultants to "trim the fiscal fat" from the state's budget.

After an exhaustive selection process, legislative leaders and Governor Mark Dayton hired more than twenty private consultants to help cut millions from the state's 2012 budget. Consultants indicated the potential to cut $20 million from the budget, premised on previous successes in other states amounting to $30-140 million in cuts. Just how much these twenty-two consultants will cost Minnesota is unknown, but their share is tied to how much superfluous cost the consultants can weed out of the budget.

Despite what seems like a promising bipartisan venture, the outlook is not all sunny. After the "core functions" fiasco that occurred while the Minnesota government shut down, it is hardly a stretch to assume that groups will quietly accept program cuts. During that time, hundreds of Minnesotans scrambled to petition the Special Master for funding throughout the shutdown. Findings of "critical core functions" versus non-critical functions could potentially cause a headache for consultants attempting to slash excessive expenditures in departments with "critical" status.

Why can't we work together?

Some critics also rightfully wonder why Minnesota is contracting private consultants, when the Minneapolis Internal Audit Department (IAD), created in 2009, provides this very function for Minnesota's largest city. An internal auditing watchdog, the IAD evaluates the integrity of financial records and reports, evaluates city departments for risks of fraud, and maximizes efficiency. Yet as the state hires twenty-two outside consultants, the Minneapolis City Council is considering cutting the IAD in half to generate $130,000 in savings. One of the department's three auditor positions could be eliminated.

It necessarily begs the question: why can't we use the resources already available to find an efficient solution for both the state and the largest city in state? Both are in desperate need for financial help. Although Minnesota's closing balance for FY 2011 is $526 million greater than the original forecast, slow growth is expected through 2013; the state is hardly out of the woods. And Minneapolis is faring even worse. The 2012 recommended budget is $1.198 billion, a $10 million decrease from the 2011 adopted budget. Worse, despite certifying in 2010 that Minneapolis would receive $87.5 million in local government aid from the Minnesota Department of Revenue (MDR), constraints on the state budget forced the MDR to reduce that amount by $23.4 million.

 It's clear that Minnesotans are facing economically tough times, so couldn't the state and the largest city work with each other, rather than parallel the efforts of one another? Utilizing resources already in place across state, county and city limits could potentially save money, save jobs, and build a sense of camaraderie. It seems obvious that sharing resources distributes the cost more evenly, saving money both the state and the city desperately need. Either way, it looks like Minnesotans better brace for the worst, because funding is going to get slashed, critical or not. 

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