State facing big deficits
Minnesota faces a $1.2 billion deficit for the current two-year budget cycle and a $5.4 billion shortfall by the end of fiscal 2013, state officials announced Dec. 2.
The November budget forecast shows that while the economy is slowly recovering, unemployment is up and wages are dramatically down, leading to lower tax receipts, officials said. The $5.4 billion gap is nearly $1 billion larger than estimated earlier this year.
However, the latest estimate is based on assumptions that include paying back $1.2 billion of delayed K-12 funding imposed by Gov. Tim Pawlenty. The governor and budget officials noted that postponing the repayment would take a large chunk out of the predicted deficit.
Pawlenty said the solution to the current deficit is for the state to live within its resources, hold the line on taxes, and become more friendly to private business to encourage job creation. He proposed that legislative committees begin meeting now to have a budget plan ready for the session that begins Feb. 4, but said more “unallotments” are possible if the Legislature doesn’t reach an agreement with him.
Education Minnesota President Tom Dooher said cuts are the wrong solution. “Our union stands firm on the principle that education – the cornerstone on which our children’s and our state’s future will be built – must remain the state’s priority,” he said.
“We must grow – not cut – our way out of this financial predicament, and investment in education is the key to doing that. Gimmicks, cuts and delays are not acceptable. Poor decisions by the governor and other state leaders put us in this economic crisis. Now we need them to help lead us out of it.
“Education Minnesota will continue to advocate for reforming the pre-K-12 and higher education funding system so that it is equitable, sustainable, predicable and sufficient, so that Minnesota is positioned to prosper for the long term once again.”
Read President Dooher's statement on teacher contracts
December 02, 2009