ST. PAUL – State economists say Minnesota lawmakers must now solve a $4.57 billion budget deficit for Fiscal Year 2010-11 by the time the Legislature adjourns in mid-May. State Representative Paul Torkelson (R-Watonwan County) said that number is both daunting and deceiving.
“If we’re being honest with the public, they should know that Minnesota’s deficit is actually $6.393 billion, which is $1.5 billion more than the previous projection,” Torkelson said. “We’re using $1.8 billion in one-time federal money to buy down our deficit, and even that stimulus funding creates its own set of problems.”
Torkelson said increasing state expenditures continue to cause our budget woes. Tax collections are down $1.16 billion while state spending is increasing by $152 million.
Worse, the federal funding comes with strings attached. Some programs likely to see a reduction in their spending increases this session – such as health and welfare – cannot be touched if the federal money is utilized.
“Not only will the federal revenue protect some program areas, it will also force spending increases,” Torkelson said.
Torkelson said the federal stimulus money will be helpful in the short term, however, accepting those funds means the State of Minnesota must continue unsustainable increases in spending. He adds that these temporary funds coming from Washington only serve to delay the day of reckoning.
“In other words, we’ll need to find another $800 million to trim from other budget areas to make this work,” Torkelson said.
“We have a long road ahead of us in order to solve this mammoth state budget shortfall,” Torkelson said. “But these latest figures tell me that even more budget reductions will be necessary for both the short and long term.”
Torkelson added that state economists forecast that Minnesota’s next budget, FY 2012-13, already shows a $5.133 billion budget deficit.