MINNEAPOLIS, March 7, 2008 - Gov. Tim Pawlenty recommended Friday using $300 million from the Health Care Access Fund (HCAF) in the next year and cutting $187 from health care programs to help address a nearly $1 billion shortfall.

Overall, Pawlenty would try to make up the budget gap with $592 million from reserves, HCAF, and other funds, $277 million in spending cuts, and $157 million in new revenues.

As for the HCAF, Pawlenty would do a one-time withdrawal of $250 million from the HCAF and then shift $48 million of annual spending that now comes from the general fund to the HCAF. So in total, Pawlenty proposes taking nearly $400 million from the HCAF in fiscal years 2009 to 2011.

Pawlenty’s recommendations target health care spending and protect K-12 education spending and aid to local governments. Pawlenty also included an $88 million tax cut that would mostly come by reducing the sales tax by 1/8 of a percent.

State officials announced last week that the state faced a $935 million deficit because of a sluggish economy.

In December, the MMA, sent Pawlenty a letter asking him not to use money from the Health Care Access Fund (HCAF) to fix an expected budget shortfall.

In January, when the deficit was projected to be $373 million, Pawlenty said he didn’t intend to use the HCAF surplus to balance the budget during the 2008 Legislative Session. Pawlenty made the comment at a fundraising event for his campaign fund at O’Gara’s Bar and Grille in St. Paul.