On Tuesday, the office of Minnesota Management and Budget (MMB) released their annual November economic forecast. The report, which details the state’s budget picture, projected a deficit of $188 million for the current biennium.

According to a presentation by MMB Commissioner Myron Frans, the forecast is driven by lower-than-expected revenues based on assumptions about federal legislation and U.S. GDP and wage growth. The forecast assumes the U.S. Congress will not pass a tax relief bill, and it assumes 2.2% GDP growth in 2017 – this is despite growth of more than 3% the previous two quarters.

In addition, the forecast reflected $178 million in spending on the federal Children’s Health Insurance Program (CHIP), a gap that would be closed once the funding is appropriated at the federal level.

“The number that every news outlet will report doesn’t tell the entire story of our economic health,” said Sen. John Jasinski (R-Faribault). “Far from ‘gloom and doom’, our economy is actually in good shape. Our unemployment rate is lower than it has been in years. Wages are growing, and they are projected to keep growing. Our exports increased every quarter this year. Consumer confidence is up, and our economy is growing nationally as well. The problem is this report doesn’t consider federal tax reform or funding for the Children’s Health Insurance Program; once those things officially become law, our budget picture will look quite different. The February forecast will tell us much more than this one.”