The state's February budget forecast was released today; it projects a budget deficit of $994 million, down from $1.2 billion forecast in November. Constitutionally, this deficit for the current fiscal year must be resolved before the legislature adjourns in May. Governor Tim Pawlenty released his budget proposal in February, while the DFL-controlled House and Senate have said they were waiting for today's forecast to start their planning. Several House and Senate budget divisions will begin putting together their budgets this week. Today's news is likely to lessen the financial burden slightly in some areas.

While the immediate deficit shrank, the deficit for the next two-year budget cycle grew to $5.8 billion, leaving a significant challenge for the next Governor and legislature to address in 2011.

For more information on the Minnesota budget forecast, you can visit Minnesota Public Radio or the Star Tribune.