Budget Shortfall Projected in Minnesota

Late week few in Minnesota were surprised to learn of the state's forecasted $373 million shortfall for the FY08-09 biennium. Policymakers must find a way to fill this gap by the end of the 2009 fiscal year.  The Minnesota Budget Project says, "These forecast results are further evidence that Minnesota's experiment in this decade to respond to fiscal troubles with budget gimmicks, short-term fixes and reduced investments in the state's physical and human capital has failed. The promised benefits -- a stronger economy and continued high quality of life -- have not materialized."  In a November 30 press release Governor Tim Pawlenty said, "that state government should hold the line on spending and not raise taxes on Minnesotans." The Governor's release says that he "will propose tax cuts for individuals" that would be paid for by eliminating corporate tax loopholes which relate to how business income is defined.