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~"ih~i±g~i Highlights: The Governor's 2004-05 Budget Solving the Budget Shortfall is The Governor's proposed budget for FY 2004-05 responds to the fiscal crisis facing the state in away that recognizes the economic realities facing all Minnesotans. The Governor directed that budget problems be solved without tax increases, that spending should focus on essential state services and that budget priorities be maintained through reallocating, restructuring, reducing or eliminating some state programs and grants. • Balances the budget meeting the challenge of a $4.2 billion shortfall caused by growing spending, recession and slow economic recovery • Avoids increasing taxes to balance the budget • Brings spending back in line with available revenues • Provides essential services most critical to state citizens The budget defines how the Governor intends to use state resources to improve the lives of citizens while limiting govemment to its appropriate roles. The budget plan is designed to pay for core state services and provide a prudent plan to restore Minnesota's financial stability. Taxes, Other Revenues & Resources General fund revenues are forecast to grow $1.663 billion or 6.6 percent iri the FY2004-05 biennium over the current biennium. The Governor's budget adds $1.581 billion in available resources through a combination of one-time and permanent revenue changes - as well as a $186 million increase to the balance from FY 2003. • Eliminates the tobacco funds in FY 2004 transferring $1.029 billion to the general fund. • Repeals the June sales tax acceleration buyback eliminating $160 million in revenue loss in FY 2005 under current law provisions. • Consolidates the Health Care Access Fund into the general fund resulting in a one-time revenue gain of $166 million in FY 2004-05 from the funds projected surplus. Projected future shortfalls for the fund are managed within the Governor's recommendations for the general fund. • Transf®rs $29 million from state special revenue funds including $10 million from the state govemment special revenue fund, $10 million from the solid waste fund, and $9 million from other dedicated accounts • Permanently Increases revenues associated with Human Services programs by $178 million by increasing the Medical Assistance Surcharge, increased RTC collections and other DHS collections • • Governor's 2004-05 Budget