Anticipating a Sobering MN Budget Forecast; Search for $$$ On

ST. PAUL, Minn. - Minnesota state officials are preparing for gloomy financial news with Wednesday's release of the economic forecast that sets the stage for budget deliberations in the state. As finance officials detail how expected spending and revenue will match up, a deepening pool of red ink is predicted.

Another huge deficit is likely to mean another round of spending cuts, after billions of dollars already have been slashed from state programs in the last few years. Eliot Seide, executive director of AFSCME Council 5, the labor union that represents more than 43,000 government workers, says it's time for Minnesota lawmakers to increase revenue by creating a more equitable tax system.

"In this state, our wealthiest citizens pay only two-thirds of their fair share of state and local taxes. We need to make taxes fair if we want to remain an above-average state. If the wealthiest ten percent paid their fair share of income taxes, the state would raise $3.8 billion."

Gov. Tim Pawlenty and others contend the state spent less money in the previous biennium without having to raise taxes or shut down government operations. However, Seide believes asking the wealthy to pay more is not only a matter of fairness, but a necessary step to balance the budget and protect the public services that working families need most during tough times.

"Great states need to invest in education. They need to invest in health care, transportation and good jobs that can raise a family. And we've already seen tremendous cuts in all these areas: parks, libraries, larger classroom size, higher tuition. It's time for this to end."

Pawlenty has said he is inclined to hold off on any major budget decisions until the Legislature reconvenes in February. Last year, he pledged that raising taxes in this economy would not be an option. However, tax collections have lagged by more than $200 million since the previous budget forecast was released in March.

Today's estimate is one of two annual analyses of state tax collections and spending patterns that lawmakers rely on to help them set the state budget.