Major budget cuts foreseen in state’s future

"Severe" and "devastating" were two words used by lawmakers to describe budget cuts they may have to make to fix Minnesota's projected budget gap without new revenues. 

According to Senate Lead Fiscal Analyst Matt Massman, projected budget deficits may force legislators to cut state spending by as much as 15 percent between fiscal years 2011 and 2013.

Massman and House Chief Fiscal Analyst Bill Marx presented several budget scenarios to members of the Legislative Commission on Planning and Fiscal Policy's Subcommittee on a Balanced Budget. (WATCH)

Massman said a 7.6 percent cut would be needed to solve an estimated $1.2 billion deficit in Fiscal Year 2011. If that cut was made permanent, the state would still need to cut an additional $3 billion, or 8.9 percent, in fiscal years 2012 and 2013.

"Those were some pretty severe numbers," said Senate Majority Leader Larry Pogemiller (DFL-Mpls), co-chairman of the subcommittee. Senate President James Metzen (DFL-South St. Paul) called the projections "very devastating."

&nbspDocuments laying out possible budget scenarios presented by Massman and Marx will be available on the LCPFP's Web page later today.

Pogemiller urged state budget officials to speed up work on Gov. Tim Pawlenty's forthcoming supplemental budget proposals, which Minnesota Management and Budget Commissioner Tom Hanson said would be available in early January.

"We would like very badly to have our committees working. The way this place works, it's hard for them to proceed until we have the governor's recommendations," Pogemiller told Hanson.

Also at the meeting, Hanson and State Budget Director James Schowalter gave an update on the state's cash flow situation. Schowalter said the state may have to look at either delaying certain payments or using short-term borrowing to pay for its day-to-day operations beginning in March. Hanson said MMB officials will consult with the Legislative Advisory Commission sometime in January on options for short-term borrowing.