Budget News
Minnesota Management and Budget (MMB) has announced that Minnesota is now facing an estimated $2.4 billion deficit. Each year, MMB does a budget forecast in February and November, where it provides the state’s current revenue and expenditure projections. This February, just before the COVID-19 health emergency began, MMB projected that Minnesota had a $1.5 billion surplus, however, the current shock to our economy prompted an unprecedented interim analysis of the state’s finances.
Incoming tax revenue is down $3.6 billion, the state’s spending projection is up $391 million, more than 600,000 Minnesotans have filed for unemployment so far and the course of the economy is dependent on the unknown path of the pandemic. Some positive
news is that there is an incoming $2 billion in federal funds that will be used toward coronavirus response.
Both the governor and MMB cautioned against taking this projection as final word due to numerous uncertainties. One is that these projections are based on an assumption that social distancing restrictions are loosened in the fall and the economy starts recovering at that time. In reality, we can’t be certain what course the pandemic will take.
"As a nation our peak is still coming. I’m going to anticipate that this could deepen in
terms of the deficit and take this a step at a time," said Gov. Walz
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