Minnesota budget deficit nearly $1 billion

02/28/2008

Minnesota is expected to slide $935 million into the red over the next year and a half.


By PATRICIA LOPEZ
Star Tribune
February 28, 2008


Minnesota is expected to slide $935 million into the red over the next year and a half and that projected deficit could soar to $2 billion by 2011 when inflation is added.

The figure, to be released officially later this morning, is the deepest projected deficit the state has faced since 2003, when a $4.5 billion deficit forced massive budget cuts.

The state's forecaster, Global Insight, is predicting recession, but says it will be short and mild. The tax stimulus package recently passed by Congress is expected to help prime the U.S. economy, but will come too late to prevent a decline in U.S. output this year.

The forecast, which gives a detailed picture of the state's finances several years out, contains the grimmest indicator that officials had feared: a drop in individual income tax receipts, the state's single largest source of revenue.