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State Representative Tim Mahoney
100 Rev. Dr. Martin Luther King Jr. Blvd.
651-296-4277
For more information contact: Matt Swenson 651-297-8406
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FEBRUARY BUDGET FORECAST REVEALS NEED FOR FISCAL CAUTION
ST. PAUL – Rep. Tim Mahoney expressed the need for fiscal caution this session after the February Budget Forecast was released Wednesday. The forecast revealed that the state's budget situation is not as bright as many had hoped. Minnesota is not bearing the burden of a deficit, but after accounting for inflation the state budget is flat – meaning there is no additional long-term revenue available.
"The need for fiscal caution this session is real," said Rep. Mahoney. "Even though the budget is not as bright as some have made it out to be, I still have high hopes for improving our schools, reforming our health care system, and providing significant property tax relief for all Minnesotans."
Several years ago, inflation was taken out of the budget formula leaving the state with fictitious budget forecasts. Forecasts not accounting for inflation show that the state would enjoy a $2.2 billion surplus over the next biennium. However, when inflation is accounted for, the state's budget situation looks far less promising.
While the budget itself is flat, after inflation there is a $1 billion surplus of one-time money. This one-time money is revenue that will be available this session, but cannot be counted on for long-term needs like health care, education, and property tax relief. Rather, this money can only be used for one-time investments like technology grants for schools, small transportation projects, research grants for scientists, or to refill the state's dwindling budget reserve that was raided during the budget deficit of 2003.
"To achieve significant progress this session while maintaining a balanced budget, we as legislators must adopt a fiscally responsible approach to addressing the concerns of our state," said Mahoney. "While these are not easy tasks, I am certain that we are up to the challenge and hopeful we will get the job done this session. That is what voters called for in November, and that is what we as a legislature are committed to achieve."
After years of dramatic budget cuts, lawmakers are working in a Legislature of many new faces and ideas to make significant progress on the many pressing issues Minnesotans are currently facing. However, the reality of today's forecast has left the Legislature with fewer tools to do so. Nonetheless, many legislators remain hopeful that the needs of Minnesotans can be met this year through a creative and steadfast commitment to progress.
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