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ST. PAUL – Yesterday, Minnesota Management and Budget announced the November Economic Forecast, which projects a budget shortfall of $188 million for the current two-year cycle. This deficit is projected to grow to $586 million for the 2020-2021 budget cycle. Duluth lawmakers pointed to unnecessary, sizable tax cuts for corporations and the heirs of wealthy Minnesotans as reasons for the deficit.
“The Republican mismanagement of our state budget has left us facing large deficits. Massive giveaways for health insurance companies and other corporate handouts, like tax cuts for big tobacco, have put us in this position,” said Rep. Jen Schultz (DFL – Duluth). “We started the 2017 session with a budget surplus, and with it the opportunity to make greater investments to keep our state thriving, like investments in our youngest learners, our public infrastructure, and health care for Minnesotans. Our people deserve better results.”
In addition to the actions taken by Republican-led Legislature in 2017, budget officials blamed slowing U.S. economic growth and federal uncertainty the shortfall.
“There are challenges many of us are committed to tackling on a bipartisan basis. For instance, the opioid epidemic continues to spiral out of control; there were four overdoses reported in Duluth on Monday alone,” said Rep. Liz Olson (DFL – Duluth) “Solutions to this and other problems are going to require us to come together and make necessary investments and this budget outlook makes it all the more difficult to do so.”
Forecasted revenues are $559 million less than projected at the end of session, with income tax receipts coming in $461 million less. The federal government has failed to reach an agreement on funding for the Children’s Health Insurance Program, from which Minnesota would be set to receive $178 million. Necessary funding for special education has also outpaced the forecasted amount for the budget cycle by $121 million.
“People are more important than huge tax cuts to corporations. We look forward to working with Governor Dayton and our colleagues in the Legislature to make changes to ensure a sustainable budget that prioritizes people,” Rep. Schultz added.
The next budget forecast is scheduled to be released in February. The 2018 legislative session convenes February 20.
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