Minnesota Budget Forecast Sucks

Saint Paul, Minnesota

March 3, 2009

By Marty Owings

Yep, its official, our State budget really, really sucks. How bad does it suck? State Economist Dr. Tom Stinson characterized it as "the worst economic conditions since World War II". In a rare moment at the Capitol everyone seemed to agree that Minnesota is facing a deep and likely worsening economy that will probably be longer than anyone anticipated.

While the federal stimulus money will help lower the deficit from a projected $6.8 billion to around $4.7 billion, Dr. Stinson said that tax receipts would continue to decline, prompting some to speculate that the forecast may need to be revised yet again to reflect worsening conditions.

The Governor responded to questions about tax increases by saying that Minnesota must avoid raising taxes if the state is to remain competitive. He added that if the DFL controlled Legislature pushed for higher taxes that it would "cause a collision".

For their part, the DFL leadership say that some of the things that the Governor is protecting in the budget must be on the table, such as K12 education and the rainy day fund. House Speaker Margaret Anderson-Kelliher stressed the difficult situation Minnesota if facing by saying that "The news that the number of unemployed Minnesotans could fill up the Metrodome and we're on track to fill up the Metrodome once again this year with unemployed Minnesotans is not a good piece of news today."

When it was suggested that the situation was bad enough to transcend politics and partisanship, both the DFL and GOP leadership pledged their willingness to work together....stay tuned for that.

Here is video of the Press Conference highlights from today.