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. ~a .. 4~.. S ~ . Ecornomi~c Der~elopme~t The Economic Development budget includes funding for the departments of Commerce, Labor and Industry, Trade and Economic Development, the Minnesota Housing Finance Agency, and the Minnesota Historical Society as well as many small agencies and boards. This is a diverse set of agencies whose general goals include improving productivity, increasing wealth, and promoting equity. They provide services such as financing business expansions, promoting tourism, regulating financial services and utilities, promoting safe work environments, providing employment services and job-training, providing affordable housing programs, and preserving historically significant sites and documents. Economic development efforts are financed from the General Fund, federal, and other state funds. Other state funds include money generated from user fees and special taxes. Federal funds are largely spent on wastewater and drinking water systems, community development block grants, unemployment insurance, employment services, training services for people with disabilities, and housing subsidies. .. . , '.Economic Deve~o~menf;Bil# Fu~iding , Percent FY 2002-03 FY 2004-05 Chan e General Fund 433 326 (25)% All Operating Funds 1,808 1,532 (15)% The Governor's general fund budget for Economic Development totals $326 million - a 25 percent decrease from the current biennium. The budget for all funds totals $1.5 billion, a decrease of 15 percent. . A significant portion of the general fund decrease is related to the $24 million in one-time funding for affordable housing that was available in FY 2002-03. In addition, $8 million in one-time funding in FY 2002-03 was provided for workforce development related programs and special flood relief activities. Key Elements of the Budget Recommendations • The Governor's budget implements the merger of the Department of Trade and Economic Development and the Department of Economic Security. The combining of the two departments will provide opportunities to increase efficiencies and a more unified approach to workforce development. • The proposed budget reduces the General Fund appropriation for the Contaminated Site Cleanup program. The program is supported by other funding sources and will have $16.7 million available for projects in FY2004-05. • The Governor's budget recommends a reduction in some housing programs. However the Minnesota Housing Finance Agency will preserve its core services and provide housing assistance for the state's low-income population. • The elimination of the General Fund appropriation to the Minnesota Technology Incorporated (MTI) is also recommended by the Governor. MTI has non-state resources available to provide services to businesses. In addition, the Governor recommends the services of MTI that continue be closely coordinated with the activities of the Department of Trade and Economic Development in order to achieve efficiencies and avoid duplication. • The Governor recommends a 20 percent reduction in the General Fund base for the minority councils. The councils are being asked to work together to maintain their most important core functions while reducing adminsitrative costs by merging staffing and office facilities. Governor's 2004-05 Budget 18