Tuesday, March 2, 2010

State Budget deficit -- some slightly good news and then some more very bad news.

The state released the latest projections for the state's budget deficit. The good news is the forecast deficit through June 2011 is it's down from $1.2 billion to $994 million. That still means cutting nearly a $1 billion over the next year.

The bad news is the financial forecast for the next two years just got worse. According to news reports:

Minnesota's deficit projection shrank to $994 million for the rest of this budget cycle, down from the $1.2 billion projected late last year.

But there are dark times ahead -- state economists predict Minnesota's budget deficit will be $5.8 billion in the next two-year cycle.

The forecast deficit for the next two years went from $5.4 billion to $5.8 billion.

The reality of that coming deficit tsunami hasn't sunk in yet with lawmakers. It should be addressed now rather than put off until next year. How is that to be done? By cutting back on built in structural spending.

Even if lawmakers split the difference in 2011 that would mean, if distributed equally, a family of four paying $2,000 more a year in increased taxes. Without spending cuts that's $4,000 per a family of four.

The problem? We've been living well beyond our means and are still in denial. Our economic difficulties aren't over by a long shot.

1 comment:

mom said...

It means the Republican Gov took us into ruins is what it means.

It means that special interest groups just like yourself are in the pockets of the state.