New analysis: 2009 Session still leaves future deficits

The 2009 Legislative Session ended in a flurry of activity – last minute conference committees, gubernatorial vetoes and promises of unallotment – so it’s taken a little time to sort out what actually happened.

Today, the Minnesota Budget Project is releasing our analysis of the 2009 Legislative Session. The report, Surprise Resolution to Legislative Session Leaves Long-term Deficits, looks at how the Legislature and Governor ultimately solved the state’s $4.6 billion deficit. This extensive analysis summarizes the major components of the solution – federal stimulus dollars, spending reductions, line-item vetoes and unallotment – but also takes a very detailed look at what was proposed during the session, and which of those proposals ultimately became law.

Minnesota faces a very challenging fiscal future. We have a balanced budget for now, but the heavy reliance on one-time measures to solve the FY 2010-11 deficit means very little was done to solve deficits looming in the near future. In particular, the Governor’s refusal to approve any major revenue increases during the session took one of the most important long-term budgeting tools off the table.

For those that were hoping an improving economy would soften future deficits, the July state economic update gives little hope. Recent economic news suggests a weaker recovery than previously expected, which means the state’s future budget situation could be worse than predicted. Earlier this week, state economist Tom Stinson told Politics in Minnesota that a new deficit is likely to open up for the current biennium (FY 2010-11) when the November Economic Forecast is released later this year.

So, take a deep breath and recover from the session. But don’t get too comfortable; more tough times are ahead.

-Christina Wessel

About Christina Wessel

Christina served as the Minnesota Budget Project's deputy director until January 2014.
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