St. Paul – The Minnesota Management and Budget office announced that Minnesota’s budget forecast has taken a dramatic, negative turn in the wake of the COVID-19 pandemic and the resulting economic shutdown. Just months ago, Minnesota had a projected $1.513 billion surplus. Today, Minnesota is facing a projected $2.426 billion deficit.
“The disastrous effects of the pandemic and economic shutdown are manifesting themselves across Minnesota,” said Rep. Tim Miller (R-Prinsburg). “This budget deficit demonstrates how Governor Walz’s decision to arbitrarily shut down our economy has damaged our state. The loss of economic activity has shattered our surplus and saddled us with a difficult road ahead.”
The projected budget shortfall will be addressed by the Minnesota Legislature. The Minnesota Legislature writes the state’s biennial budgets, and the state constitution of Minnesota requires that every budget be balanced. Therefore, the current budget deficit will need to be addressed through tax increases or spending cuts.
“The loss of nearly $4 billion of state revenue should be a rude awakening to those who are dismissive of the economic damage taking place,” said Rep. Miller. “We need clear-eyed leadership on this issue. The governor has done nothing but push these problems off to a later date. Instead, we need to be prepared to cut budgets, make hard choices, and fix this mess now before it gets even more out of control.”
Minnesota has consistently built up a rainy-day savings fund over the last several years. Currently, that fund contains $2.359 billion. Those funds could be used to address this budget shortfall.
“Minnesota needs to be reopened immediately,” said Rep. Miller. “If this economic shutdown continues, then we will be faced with steeper and steeper deficits. This shortfall could be just the beginning. Businesses and workers have been devastated by this shutdown. My concern is that government will raise taxes on Minnesota taxpayers to fix this problem which government created. That should not happen. Instead, we need get our economy open again to restore livelihoods, to let people live their lives, and to stem the rising deficits.”