The Minnesota Budget Project (MBP) recently updated their policy brief, Revenue-Raising Options to Help Solve Minnesota's Budget Deficit. According to MBP, "Minnesota faces a weak economy, daunting state deficits and some very tough choices." The state's February economic forecasts show an expected budget deficit for the fiscal year 2012-13 biennium of $7 billion.
However, this grim news doesn't mean that policymakers are without options. In fact, the policy brief explains that their options include enacting a 10 percent income tax surcharge, creating new income tax brackets, modernizing the sales tax, and eliminating various business tax preferences. Minnesota lawmakers should follow in the footsteps of other states facing tough economic times and use a balanced approach of spending cuts and tax increases to fill the state's shortfall, rather than relying entirely on cuts in public services.