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MN Deficit Projected to be $1.2 Billion!

by Laura Kundsen

Tom Stinson, Minnesota state economist, released figure projecting a $1.2 billion deficit in the states general fund for the budget cycle ending in June 2011. The figures also add roughly $1 billion to the state's projected 2012-2013 budget increasing that figure to the $5.4 billion dollar range.

Minnesota is going broke because our state leaders refuse to action to fix the structural imbalances in our state budget. With Pawlenty running for President and 20% of our the Minnesota Legislature running for Governor it is doubtful they will have the guts to implement long term solutions in the up coming legislative session.

Two possible proposals from the Ventura administration are still viable today and would contribute to the solving the budget imbalance.

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1. The Ventura administration proposed tax reform. Among the proposed changes were:

• Extending the sales tax to certain services.

• Removing some current sales tax exemptions.

• Reducing the sales tax rate from 6.5% to 6%.

• Changing the definition of business inputs (which are exempt from the sales tax) and expanding the definition of capital equipment for purposes of the capital equipment exemption

The estimated increase of this reform was $1.086 billion in revenue during the 2004-05 budget. 

2. Reduce the size and cost of government with a unicameral legislature. Not only would we save money but perhaps with fewer of them they could make compromises and find solutions!

MN 2010 Budget Deficit Among Top 10 Largest in Nation 

 

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