More deficits coming?
To the Editor:
Is another state deficit on the horizon?
On Tuesday, the Minnesota Management and Budget office released its monthly review for revenue, and it found that year-to-date receipts are $95 million less than forecast. This is the fourth consecutive month in which state spending has outpaced incoming tax collections.
This declining economic trend is certainly cause for concern. It would not be at all surprising if the problem is significantly worse by the time session begins.
Historic spending increases by legislative Democrats and Gov. Mark Dayton are the reason why I am bearish on Minnesota’s economic state. Over the past two years, Democrats increased state spending by more than $4 billion, and increased taxes and fees on all hardworking Minnesotans by more than $2 billion.
Specifically, MMB noted that net general fund revenues in May were $17 million less than forecast. Individual income tax withholding in May was $27 million less than forecast, but higher than expected payments accompanying extensions reduced the individual income tax shortfall for the month to $15 million. General sales tax receipts in May were also $1 million less than forecast.
When you dramatically increase your spending obligations and revenue isn’t coming in at the rate you hoped it would, your state is going to face a significant budget deficit. If these numbers don’t turn around quickly, Minnesota will face a substantial shortfall once again in the next two year budget cycle.
State Rep. Bob Gunther