This morning the Minnesota Management and Budget Office released figures that show a reduction to the state's projected deficit of $1.16 billion. The new budget shortfall is now estimated to slightly exceed $5 billion, an improvement from the $6.2 billion budget gap projected last year. The Governor and Legislature will use the updated forecast figures to set the budget for the 2012-13 biennium.
- According to State Economist Tom Stinson, the $1.16 billion improvement in the budget shortfall is due to $176 million in budget reductions and $984 million from increased revenue projections for both income and sales taxes. Mr. Stinson said the state's projected deficit has narrowed in part because of the extension of Bush-era tax cuts. Minnesota Management and Budget Commissioner Jim Schowalter said the economic update is positive but cautioned that the improved forecast may be overshadowed by such factors as rising gasoline and oil prices.
- The Republican majority said that while the economic improvement is a positive sign, it is not the time to raise taxes, because increasing taxes will drive businesses elsewhere. Republicans confirmed that the first deadline of March 25, when all finance-related bills must be reported to either Senate Finance Committee or House Ways and Means Committees, is still in place.
- Gov. Mark Dayton will hold a formal press conference at 5:00 this afternoon, and he is expected to announce that $200 million in proposed cuts will be reinstated to nursing homes and other health-related programs. Other provisions that Gov. Dayton has said he will change include removing the 3% surcharge on earners with incomes of more than $500,000. To view a copy of the Governor's press release on the forecast, click here.