ST. PAUL – State Representative Greg Davids (R-Preston) said state financial news continues to be grim, as state economists recently revised Minnesota’s budget deficit to total $4.57 billion.
Davids said that total could have been much worse. According to Minnesota’s February financial forecast for Fiscal Year 2010-11, the state would have shown a $6.393 billion deficit. But factoring in $1.8 billion in federal funds lowers the latest deficit projection to $4.57 billion.
“State revenues are down $1.116 billion and state spending is up $152 million,” Davids noted. “We’re not in this position because we’re taxed too little. The problem continues to be that we spend too much.”
Rep. Davids said he’s heard from several residents who suggested that “taxing the rich” could help solve our budget woes, so he asked an analyst to investigate the idea. He found that by raising taxes on Minnesota’s richest citizens at the highest level in the nation, it would raise less than $100 million over the next two years.
“That barely puts a dent in $4.57 billion,” Davids noted.
Davids said that several areas within Minnesota’s government are growing at unsustainable rates, and that reformed spending is needed in order to solve this crisis.
“Now it’s time for the Minnesota House to put a bill together that addresses this shortfall,” Davids said. “We’ve waited long enough for this final deficit total, and it’s time to get this budget balanced.”