Capitol Chatter: Baby boomers make state decisions difficult
ST. PAUL – Baby boomers will make writing the state budget harder, reduce the Minnesota labor force and cause state health care spending to soar, State Demographer Susan Brower said.
“Aging pressure” is how Brower termed the issue.
The demographer said aging boomers will “place new pressures on the state budget, especially in the areas of health and long-term care.”
An older population means more money would be needed for a Medicare supplement program, she said, as well as programs that fund health care needs of elderly, poor and disabled Minnesotans.
One of the big issues will be state funding for long-term care, such as nursing homes. Brower presented numbers showing that a third of baby boomers do not know how they would pay for long-term care and nearly 20 percent expect to just rely on government-paid programs.
If the state is to pay health expenses, she said, legislators need to understand that those costs rise dramatically as a person ages. Annual health care costs are $6,500 for those ages 45 to 64, she said, but soar to $10,700 for those older than 65.
While baby boomers head to retirement and wait in doctors’ offices for care, they will leave behind a gap in the state workforce.
Brower said the nearly 1.5 percent annual growth in the workforce size from the late 1990s will shrink to 0.2 percent by 2025. As that creates a worker shortage, Brower said, education needs to pick up the slack to train more efficient workers.
Rep. Paul Marquart, DFL-Dilworth, said what population growth there is will come from minorities such as Hispanic and black Minnesotans, so the state education system needs to make sure they learn as well as white students.
“That will be huge for economic competitiveness,” Marquart said.
The rest of April will be packed with numbers as House and Senate Democrats release their budget plans piecemeal.
In coming days, the Senate will announce its state department, transportation and judiciary budget plans.
The House expects to see its health and human services funding bill soon, too.
“We’ve shifted into high gear on the budget,” said Senate Majority Leader Tom Bakk, DFL-Cook.
The way things work at the Legislature, each budget committee chairman is in charge of drawing up a budget in his particular area after legislative leaders decide how much is available to spend.
There is general agreement among Democrats who control the Legislature and Democratic Gov. Mark Dayton to spend about $38 billion in the next two years. But they differ on specifics about how much to spend in each area.
Bakk said the DFL budget outlines, being filled out this month, are good starts, but not the end of budget changes. “This is going to take more than one budget cycle to get us where Minnesotans want us to be.”
Bonding bills out soon
Two of the three public works funding bills are due out soon, with plenty of questions about whether they can pass.
Dayton plans to let Minnesotans know early in the week how he would spend money borrowed for public works projects around the state. The House expects to release its public works plan Tuesday, but senators’ suggestions will come later.
Their bills are expected to propose spending $750 million to $800 million, to be paid by the state selling bonds.
Republicans say a bonding bill is about the only place where they have a say since Democrats control the Legislature and governor’s office, and they generally do not want to borrow the money. The state constitution requires bonding bills to pass with a three-fifths vote, meaning Democrats cannot pass the bill on their own.
Dayton is expected to ask for more than $100 million to begin a state Capitol renovation project that eventually is expected to cost more than twice that.
Republican leaders said Friday that they want the Capitol work, but would not commit to supporting a bonding bill this year.
“The bonding project I want to do is the Capitol,” said Senate Majority Leader Tom Bakk, DFL-Book.
Hospital changes eyed
Minnesota officials are keeping a close watch on proposed changes to Fairview Health Systems.
Attorney General Lori Swanson scheduled a Sunday hearing about South Dakota-based Sanford Health’s proposed Fairview takeover. The next day, University of Minnesota President Eric Kaler set a meeting to discuss the possibility of the university running Fairview.
Fairview is home to the University of Minnesota Medical Center and clinics.
“We are looking closely,” Deputy Senate Majority Leader Jeff Hayden, DFL-Minneapolis, about the situation.
However, he added, it is too soon to know if the Legislature needs to get involved. “It’s a fluid situation.”
Beyond the university situation, Swanson is investigating the nonprofit health organization. Nearly a year ago Fairview said it would hunt for a new chief executive officer, but that position remains open, Swanson said.
Swanson, who regulates charities, said she is concerned that a Minnesota charity could be run by an out-of-state organization.
Sanford operates hospitals, clinics, nursing homes, pharmacies and other health-related facilities in South Dakota, Nebraska, Iowa, North Dakota and Minnesota.
Danielle Killey contributed to this report.