This past Tuesday (May 5), the Minnesota Management and Budget (MMB) office released an updated state budget forecast, which projects an estimated budget deficit of $2.426 billion for the 2020-2021 biennium.
The updated forecast, which is used to guide consideration of spending bills at the legislature, anticipates dramatically lower revenues as a result of the coronavirus pandemic. In accordance with state law, the balance of the reserve is $2.359 billion.
“Our deficit should come as no surprise, as unfortunate as it is,” said District 16 Sen. Gary Dahms of Redwood Falls. “There was certainly no predicting that the effects of the pandemic would hit this hard in the beginning. The continued and almost complete closure of the state’s businesses, the lack of consumer spending and the fear in these uncertain times have all contributed to our current economic situation.”
“The Senate has already taken steps to mitigate damage. We have implemented a salary freeze for our employees and are hoping to renegotiate the second year of state employee contracts, so thousands will not have to face harsher measures. We are developing the COVID-19 economic recovery task force, a conglomeration of the best people and resources, to find the best step forward to boost the state,” added Dahms. “We absolutely have to reinvigorate our economy and make people feel safe again. With Minnesota’s economy moving once more, we will see livelihoods retained, a softened budget shortfall and the maintenance of necessary state programs.”