February 28, 2008
Budget Forecast Released
The February budget forecast was released today and it revealed that the state’s projected shortfall has grown to $935 for the 2008-09 biennium. The news gets even worse when looking at projections for the 2010-2011 biennium. Budget planning estimates now show a projected budget shortfall of just over $2 billion – and that is assuming a very modest inflation rate of 1.9 percent per year – for 2010-2011.
The shortfall is due almost entirely to a massive reduction in expected revenue. Projected spending is up only $64 million from the November forecast. By contrast, projected revenues are down 1.27 billion from projections at the end of the last legislative session.
At a press conference Governor Pawlenty indicated that he is determined to resolve the projected shortfall without raising taxes. He will propose a combination of spending cuts and using budget reserves. House and Senate leaders said that they intend to wait for the governor’s recommendations before offering alternatives.
Here is a link to the Department of Finance web page where you can access further information about the forecast:
http://www.finance.state.mn.us/