The economic shutdown has turned Minnesota’s projected $1.5 billion budget surplus into a $2.4 billion deficit, state officials announced Tuesday.
“A deficit of $2.426 billion is now projected for the current biennium, which is almost a $4 billion change compared to the February forecast. Revenues are expected to be $3.611 billion lower and spending, including appropriations enacted since February, is expected to be $391 million higher,” Minnesota Management and Budget (MMB) announced in a press release.
Reacting to the news, Rep. Steve Drazkowski (R-Mazeppa) said Gov. Tim Walz “took a sledgehammer to Minnesota’s economy and we are all suffering for that decision.”
“We knew our state’s economy would be impacted by the pandemic itself. However, the governor has exacerbated that pain by shutting down our state economy. That shutdown has interrupted normal state government revenue streams and created this new deficit,” he said in a statement. “In addition to destroying livelihoods across the state, the governor has sent us from a surplus to a deficit.”
Minnesota currently has $2.35 billion stashed away in its rainy-day fund, which can be used to “mitigate the budgetary impact of the crisis,” MMB said.
However, Drazkowski said the projected deficit will have an enormous impact on the crafting of the next biennial budget during next year’s legislative session. Since the state constitution requires lawmakers to balance the budget, spending cuts or tax increases will have to be used to address the shortfall.
Drazkowski urged Minnesotans to “remain vigilant” in the coming months as lawmakers grapple with the budget deficit.
“Gov. Walz has created a budget problem, and he is going to ask Minnesotans for a bailout. The governor will use this budget shortfall as an excuse to increase taxes,” he said. “However, we cannot allow state government to double-dip into the pockets of hard-working Minnesotans. The new budget projection demonstrates that Minnesota needs to limit government, cut budgets, and not take more money from Minnesotans who are already struggling due to Gov. Walz’s decision to shut down our economy.”
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