OPINION Positives and negatives found in latest state budget forecast
Tuesday, December 11, 2012 4:28 AM
State Representative Greg Davids (R-Preston) said there's good news and bad news in Minnesota's latest budget forecast.
The good: a $1.3 billion surplus for the remainder of the Fiscal Year 2012-13 budget cycle, which ends this summer. The bad: a $1.1 billion budget deficit for the upcoming Fiscal Year 2014-15 period.
Davids said this $1.1 billion number must be erased before session adjourns during the 2013 legislative session.
"Residents should remember that Minnesota has had nothing but positive economic projections for nearly a year," Davids said.
"In 2010, the November forecast showed a projected $6.2 billion deficit, and the updated projection in February, 2011 shaved that number to $5.1 billion. So if the positive projections continue through the holidays, it's not out of the question that the deficit could be gone by the beginning of March."
"But residents should also be aware that if the president and Congress can't get their act together, and the United States falls off the fiscal cliff, all bets are off in terms of Minnesota's economic standing," Davids warned.
Davids, who is the current chair of the Minnesota House Taxes Committee, said state economists noted that higher revenues and lower spending created the $1.3 billion excess for Fiscal Year 2013.
Forcing government to live within its means was a priority for the Republican-led Legislature over the past two years, but now that Democrats have taken control, he expects a different economic path to be pursued at the State Capitol.
"When Democrats previously controlled the Legislature for four years, they tried raising taxes on everything from beer to Internet purchases to personal income, and attempted to cut Local Government Aid," Davids said.
"With a DFL friend in the Governor's Office, I expect many of these ideas not only to be proposed, but to be signed into law over the next few months in order to increase government spending. I believe the days of living within our means will soon be over."