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ST. PAUL – A new state economic forecast proved what many lawmakers had feared: Minnesota’s economy is still headed in the wrong direction.
According to state economists, Minnesota now faces a $4.57 billion budget deficit for Fiscal Year 2010-11.
“This is close to our previous projection if you figure in federal funding,” Gunther said. “This means cuts like Governor Pawlenty suggested might be what the DFL majority has to come up with in order to solve this financial crisis.”
Gunther noted that Minnesota’s deficit would have shown a $6.393 billion deficit, but by using $1.8 billion in federal funds the latest deficit projection is reduced to $4.57 billion.
Gunther said state spending continues to outpace revenue collections by an alarming rate.
“Even though the financial pain isn’t excruciating, it certainly is severe,” Gunther said. “There will be substantial reductions to many state government programs when all is said and done.”
“This is the perfect time where reform could happen by getting rid of duplicative and inefficient programs that Minnesota currently supports,” Gunther said. “Our state has a spending problem, and we need to address it.”
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