Published on Wednesday, 30 November -0001 00:00
Revised economic forecast reveals $5 billion budget deficit, more work to do
The state received its latest economic forecast today revealing a slightly improved economy and budget outlook. The state budget deficit improved by about $1 billion, leaving a $5 billion deficit for the upcoming budget cycle. State Rep. Larry Hosch (DFL-St. Joseph) said the improvement is a good sign, but far from a solution to the state's need for more jobs and fiscal stability.
"We still have a lot more work to do to get Minnesota back on strong financial footing," said Hosch. "This is still a huge deficit and far too many Minnesotans are out of work. It reinforces the need to start working now to solve this deficit."
One significant reason for the improved forecast was Governor Dayton's action early Medical Assistance. The state's bottom line was improved by about $200 million as a result.
"This just more evidence of why early MA was good deal for Minnesota taxpayers," said Hosch. "It is already leading to more efficient use of our health care dollars along with infusing needed resources into our hospitals and care providers."
Governor Dayton has already released his proposed revisions to his budget in light of the new forecast. He plans to remove a 3 percent surcharge to income taxes of over $500,000 per year. He will also mitigate cuts to nursing homes and long term care facilities. Legislators, including Hosch, had sent Governor Dayton a letter last week urging him to reconsider cuts to nursing homes if the budget deficit improved.
"Nursing homes in greater Minnesota are really on the brink," said Hosch. "I am glad the Governor has minimized these cuts."
The Governor is also urging the Legislature to stop the delay of tax refund payments to Minnesota businesses as a budget-balancing tool.
"Jobs remain a top priority as we balance the budget and this is a positive step to inject capital more quickly into our small businesses," said Hosch.
With the budget level now set, Hosch said the attention turns to the Republican majority to put forward their budget. Republicans have indicated they will present an all-cuts budget.