Stumpf: State budget work should begin promptly
Twice a year, state economists present an economic forecast to the Minnesota Legislature. The forecast details the state’s revenue collections and spending patterns and estimates the state’s budget balance for upcoming fiscal years.
Last November, the Legislature learned the state’s budget balance for Fiscal Years 2012-2013 was $6.2 billion in the red. The updated February forecast released this week shows the budget deficit now stands at $5 billion – a $1.2 billion improvement from November’s prediction.
This is an important number because it tells lawmakers exactly how much money exists for the two-year budget cycle that begins July 1 of this year. Right now, the Legislature and the Governor are busy creating a budget that the state will operate under for fiscal years 2012 and 2013. We do this every two years, deciding how much money areas such as education and health care will receive, and whether any spending reductions need to be made. With a $5 billion deficit, it’s clear that spending reductions definitely will be part of the solution this year.
Now that the February forecast has been released, the real budget work can begin in earnest. The Governor released his initial budget proposal two weeks ago but already has signaled he will update those ideas based on the new economic information. His updated budget plan is expected to be finalized in the next two weeks.
Likewise, the Republican leaders in the House and Senate have promised a budget solution will be passed out of committees by March 25. Parties controlling each chamber of the Legislature typically produce their own, counter budget proposals that are negotiated against the Governor’s and eventually settled upon by the end of a legislative session.
This year, the legislative session is required to end on May 23. If compromise cannot be reached by May 23, the Governor will need to call the Legislature into a special session. At that point, the Legislature must agree upon a budget solution no later than June 30, otherwise the state government will shutdown. Minnesota cannot operate under deficits like the federal government is allowed. If no budget exists for state services, government simply stops until an agreement can be reached.
I do not believe there is a single person in the Capitol who hopes to reach the point of government shutdown or special legislative session. However, both parties need to compromise in order to get our work done on time. The Governor has made great strides to compromise – he said his updated budget plan will respond to some of the Republican criticism he’s received over his initial plan, removing some tax increases and reducing cuts to nursing homes.
In contrast, Republican leaders sent a letter to the Governor that outwardly rejected any budget plan that included new revenue, even though they have not reviewed any specific bill to do so. In addition, they have set a budget-release deadline of March 25, yet not a single budget bill has been introduced in the Senate or heard in a Senate committee.
If we’re going to get our work done responsibly and on time, we all need to be willing to work together. I am very hopeful that in the coming weeks, we can put aside our political differences and start focusing on the $5 billion budget problem that we’ve all been elected to address.