Sen. Tony Lourey Column: Budget forecast shows deficit has deepened

Monday, March 9th, 2009 at 5:53 am

(Article from Sen. Tony Lourey)

The February Forecast, the second annual report on the state’s economic performance, was recently released.  It showed that Minnesota’s budget deficit is $4.6 billion because the state can factor in $1.8 billion in federal funds from the economic recovery package enacted by Congress.  If not for these federal dollars, however, Minnesota would be looking at a $6.4 billion deficit-a figure up by nearly $2 billion since the last economic forecast was released in November.

We’re very fortunate to have this short-term help from the federal government, but as a state, we can’t ignore the fact that our budget deficit increased so drastically in three short months.  State economists said this is due to a $1.3 billion drop in revenue collections since November.

Additionally, the state’s job numbers are continuing to plummet.  They warned that Minnesota is on a path to lose an additional 120,000 jobs in 2009.  Clearly, the state’s economy is continuing to decline and we must think long-term on how to get it back on track.

The economic stimulus dollars can’t be viewed as the end-all solution to our budget crisis, as they are one-time monies designed to provide an immediate boost to the economy.  Most of the funds Minnesota received will go directly to specific projects.  It’s also important to remember that these funds won’t be carried forward into the next biennium, where a $6.5 billion budget deficit is predicted for 2012-13.

To avoid these serious future problems, we’re going to have to make the tough choices that will lead to long-term economic recovery.  We can no longer rely on the short-term, one-time fixes that have led to this economic situation.  Lawmakers will need to look at a combination of sustainable spending reforms, tax reforms, and budget cuts to carry us forward.

It’s likely that every Minnesotan will feel the impacts of the serious state spending cuts that will be needed.  However, I’m mindful of the economic difficulties you and your families are already experiencing during these unsettling times.  Every budgetary decision that I make will be focused on positioning our state for economic recovery and achieving our long-term interests. In the upcoming weeks, the governor will also submit a revised budget to factor in the new economic forecast.  I hope that he will also propose long-term solutions that consider the best interests of the state.  The months ahead are going to be very difficult, filled with tough and painful decisions, but we must ultimately work together to resolve this budget and build a stronger future.

I encourage you to contact me with your questions or comments on any issue.  You may call me at 651-296-0293, send an e-mail to , or write to 303 State Capitol, St. Paul, MN 55155-1606.

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