ST. PAUL – State economists projected recently that Minnesota will face a $700 million deficit for Fiscal Year 2006-2007. This figure pales in comparison to the record $4.5 billion shortfall the state faced for FY ’04-05.
“The latest forecast shows total revenues increasing by roughly $1 billion from the previous biennium,” said State Representative Dean Urdahl (R-Grove City). “The problem is that estimates show spending is increasing by $2 billion. This once again shows that the state has a spending problem, not a revenue problem.”
Urdahl added that Minnesota revenue collections growing rapidly at 7.9 percent. The problem is that health and human services costs for the 2006-07 biennum, specifically medical assistance programs, are now projected to grow by at least 20 percent – or an additional $309 million. The forecast also includes an additional $210 million in spending for enrollment growth in higher education, which pushed the deficit even higher.
But Urdahl pointed out that there are several positives in this budget forecast. First, there was a net of $495 million more in revenue for the year ending June 30, 2005. That is automatically allocated to filling the rest of the budget reserve.
In addition, Urdahl said the Health Care Access Fund, which had no money, is now estimated to have a surplus of $226 million. This is primarily due to more health care costs being paid for out of the general fund than expected.
Despite the positives, Urdahl said eliminating another budget deficit will present a challenge.
“The governor has said we are not going to raise taxes, so even if lawmakers decided that was the course of action to take, he would veto the bill,” Urdahl said. “Because of this, it is obvious that raising taxes will not be part of the solution.”
“As always, my constituents are welcomed and encouraged to call me with their thoughts on how this budget deficit should be solved,” Urdahl concluded.
You can contact Rep. Urdahl at his office by mail at 521 State Office Bldg., 100 Martin Luther King Jr. Blvd., St. Paul, MN 55155, by phone at (651) 296 4344, or by email at firstname.lastname@example.org.