State Deficit Forecast Shrinks by $1.2 B

Minnesota legislators have been addressing a projected $6.2 billion deficit over the last few months, but now they're addressing a new number—$5 billion.

“Seems like the first time we’ve had any good news on this front since 2007,” said Rep. Ryan Winkler (DFL-District 44B), who represents Golden Valley and St. Louis Park. “At some point, the economy has to turn into a recovery, and I think these numbers reflect that.”

The Minnesota Management and Budget Office released its first-round of numbers in November, but Monday’s forecast includes changes in tax collections and unemployment.  Monday’s numbers will be used to build a budget for the next two years.

Though the numbers are an improvement, there is still plenty of work to be done at the Capitol. Gov. Mark Dayton has proposed a plan that would raise $3.3 billion by taxing the state's highest earners, an idea Republicans have rejected. But a Republican proposal to solve the deficit entirely through spending cuts has not been well received by the Democratic governor.

By law, legislators must balance the budget by the time the session adjourns on May 23, or risk going into a special session.

“It changes some things," Winkler said, "but it’s still $5 billion, and that’s still a mammoth number.”