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Deficit Ahead, but Minnesota's Budget Picture Improving

PHOTO: The latest forecast shows the economic picture for Minnesota is improving. What was predicted in November to be a $1.1-billion shortfall for 2014-2015 has now fallen to $627-million. Photo credit: Mark Dayton
PHOTO: The latest forecast shows the economic picture for Minnesota is improving. What was predicted in November to be a $1.1-billion shortfall for 2014-2015 has now fallen to $627-million. Photo credit: Mark Dayton
March 1, 2013

ST. PAUL, Minn. – The latest forecast shows an improving budget picture for Minnesota.

For the current biennium, the state will take in more than expected, while the deficit projected for the two years to follow is getting smaller.

With the improvements, Eliot Seide, executive director of the AFSCME Council 5 state workers union, says now is the time for Minnesota to step up.

"We have had a decade of disinvestment and a decade of the budget roller coaster,” he says. “This is Minnesota's moment to finally fix the budget and raise fair revenue to create good jobs and grow the middle class."

The estimate released Thursday shows the state with nearly $300 million more for the budget cycle that runs through June. For the biennium to follow, the state is expected to be $627 million short, but that is a big drop from the $1.1 billion deficit projection from last fall.

Minnesota has been under the gun with the budget for basically the last decade and has used accounting changes and shifts and the like to help piece things together.

Seide says those days need to end and that's why AFSCME supports the budget proposal from Gov. Mark Dayton.

"In that budget there are no more gridlock,” Seide says, “no more government shutdowns, no more kicking the deficit down the road, no gimmicks, no games that pass the buck to future generations – just an honest, transparent budget that resolves the structural budget deficit."

Dayton's proposal includes a broadening of the sales tax, while increasing the state income tax on the wealthiest two percent. At the same time, Siede says increased funding would be focused on what really impacts Minnesotans, everything from help with property taxes to strengthening schools.

"We care about property tax relief,” he says, “educating our children, caring for our seniors and investing in infrastructure to create good jobs and bring new businesses here."

Republicans have criticized Dayton's plan on a number of fronts, including their view that the state's economy is still fragile and any tax hikes could lead to a set back in the recovery.

John Michaelson, Public News Service - MN