The State of Minnesota is expecting a $5.5 billion deficit for the upcoming FY 2010-11 biennium, up from the approximately $2.0 billion deficit that was projected at the end of the 2008 legislative session. State Economist Tom Stinson warns that we could be in the midst of the worst economic situation since World War II.
The mushrooming of the state deficit from the May projections to the November forecast is almost entirely the result of declining state revenue. In short, Minnesota has a revenue problem, not a spending problem. In addressing our whopping deficit, it is important that we not cut investments in education and transportation that stimulate future economic growth; both revenue increases and cautious expenditure reductions need to be considered. Return to this site later for a more in depth analysis of the state’s fiscal crisis.