On Feb. 28, state economists released an updated economic forecast that shows the state’s budget deficit is about $463 million less than was predicted in November. A $627 million shortfall now remains for the two-year budget cycle that begins July 1.
Most of the improvement is a result of improved job and economic growth. In fact, we will be back to pre-recession levels in job creation by the end of this year. The rest of the country will get there nine months later.
The new forecast is a positive sign that Minnesota’s economy is experiencing a fragile recovery. The state seems to be heading in the right direction, but the improved forecast number doesn’t change the fact that at $627 million, Minnesota still faces a significant budget deficit.
It’s vitally important that the legislature make responsible budget decisions to ensure we don’t disrupt the positive economic progress. It’s widely believed that a careful balance of spending cuts, responsible new revenue and targeted government reforms is the responsible combination needed to solve the deficit and support continued economic recovery.
State Economist Tom Stinson, who has served under Republican and Democrat administrations, confirmed this week that a balanced approach that uses spending cuts and new revenue is the best budget solution for Minnesota.
It’s going to take serious compromise in order to solve our serious budget deficit problem. This is no time for anyone to draw a line in the sand. Instead, it’s time to put away the political rhetoric and work together to confront the serious responsibilities we all have been elected to address.
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