Governor Pawlenty just announced his proposal to balance the state’s budget without the use of $408 million in expected federal Medicaid money.

He asks the legislature to accept the cuts from his previous budget proposal that have not been adopted ($405 million); cuts local government aid ($30 million); uses Iron Range economic development funds ($65 million); and takes an additional $36 million from HHS for a total reduction of $536 million.

The total additional cut to HHS would be $175 million.  While the governor indicated he would make reductions in the form of provider rate cuts, it was not clear which providers he meant nor where else in HHS the cuts would be made.

In addition, Gov. Pawlenty stated he would veto the HHS bills currently being heard in the House and the Senate.