Minnesota Faces $118 Million Budget Deficit
ST. PAUL, Minn. (AP) — The Latest on Minnesota’s projected $188 million budget deficit (all times local):
Minnesota lawmakers will have to fill a projected $188 million budget deficit next year.
State officials released an economic forecast Tuesday showing the modest deficit at the end of the current two-year budget cycle. That deficit would grow to roughly $586 million in the next three years.
It comes after a string of budget surpluses in recent years and more than $650 million in tax breaks passed by the Republican-led Legislature earlier this year.
The state’s economic officials were expected to explain the deficit Tuesday afternoon. But their initial estimate faulted slowing economic growth nationwide and the 2017 Legislature’s actions for the red ink.
But the estimate comes with major caveats, like massive unknowns with tax breaks moving through Congress and how it will impact the national economy.
Minnesota officials are about to get an update of the state’s financial standing, but Congress’s ongoing push to slash taxes means lots of uncertainty in that update.
The U.S. Senate passed $1.5 trillion in tax breaks over the weekend but few specifics are set in stone. House and Senate negotiators still need to work out the differences between their bills.
That uncertainty looms large over Minnesota’s scheduled economic forecast due Tuesday. Gov. Mark Dayton said Monday the numbers behind any budget surplus or deficit would be “speculative at best.”
Dayton says he’s waiting until after he and lawmakers get an update in March to lay out his spending priorities for 2018.
Lawmakers return to the Capitol on Feb. 20.