(St. Paul) – The office of Minnesota Management and Budget (MMB) released the findings of their May economic forecast yesterday, a special updated report commissioned to gain a clearer understanding of Minnesota’s budget health as the state manages the coronavirus pandemic. In February, the state projected a surplus of $1.513 billion for 2020-21 budget cycle. The coronavirus and its economic fallout have erased the surplus and the state is now facing a projected deficit of $2.43 billion. The $2.36 billion budget reserve remains available to mitigate the budgetary impact of the crisis.
Senator Jason Rarick (R-Pine City) released the following statement:
“I am disappointed to have such a deep deficit after only a few weeks of emergency measures. We are lucky to have planned well in previous years and the state is sure to bounce back, though the road to recovery will be steep. The governor’s continuance of business shutdowns will also be a major factor in how long it takes to reach our previous financial health.”
“It’s time to prepare for some major budget cuts. It is inevitable that the deficit will affect our 2021 state budget – education and healthcare being our largest spending areas. Opening up the economy sooner, rather than later, will prevent deep cuts in areas that provide essential government services. The Senate preemptively froze staff salaries and are hoping to renegotiate second-year contracts for all state employees. These are not measures we enjoy taking, but it could prevent lay-offs for the state’s thousands of workers.”
“There are only two weeks of the regular legislative session left. During that time, I will make informed and well-rounded decisions to serve our state in this precarious time. We have been through difficult times, before, and will come out of this situation with lessons learned and a hopeful outlook.”