Union leaders and other advocates urged lawmakers to put an emphasis on job creation and avoid damaging cuts as they address the shortfall.
In the budget forecast issued Tuesday, Management and Budget Commissioner Tom Hanson said that despite diminishing tax revenues to the state, the budget hole that legislators and Governor Tim Pawlenty now face is better than the November forecast’s prediction of a $4.8 billion shortfall. He said $1.8 billion of medical assistance funds from the American Recovery and Reinvestment Act can essentially be subtracted from the real deficit figure of $6.4 billion.
Additionally, Hanson said another $800 million in stimulus funds are available for education and other budget priorities, but the Legislature and Pawlenty will have to agree on whether and how to use those funds.
Giving an update on the economy, State Economist Tom Stinson warned that the state faces the “longest and deepest recession since World War II.” He said even after an economic recovery begins — possibly sometime next year — it might be 2012 before Minnesota recovers the jobs it will have lost in the current economic crisis.
Reacting to the forecast, the governor said his office would release revised budget proposals soon. He also reiterated his opposition to fixing the deficit with tax increases.
“If they plan on raising taxes, we’re going to have a collision,” Pawlenty said of DFL legislators.
But House Speaker Margaret Anderson Kelliher responded that budget discussions should focus on long-term solutions, not just fixing temporary shortfalls with one-time money.
“All options are on the table. That includes revenue,” Kelliher said.
Union leaders concurred. In a joint statement, Minnesota AFL-CIO President Ray Waldron and the leaders of the state’s six Regional Labor Federations called for a stronger focus on rebuilding Minnesota’s economy.
“As the state’s economy worsens, our support for a state budget built around the goal of preserving existing jobs and creating secure family-supporting jobs is growing even stronger,” they said.
“It is clear that we will not jump start the economic recovery or create and preserve good jobs simply by cutting the state budget. With six Minnesotans competing for every open job, it is foolish to add to the human costs of this recession by cutting public services and public sector jobs.
“Efforts to balance the budget by slashing pubic services will cause additional hardship to families throughout Minnesota. We attended the Legislative Budget Hearings in our regions and it’s clear that Minnesotans need and want the state to take bold action to rebuild our economy and to preserve and create sustainable, good paying jobs. We urge legislators and the governor to include raising revenue fairly, based on the ability to pay, in their plans for resolving the state’s financial crisis.”
Even with though the size of the projected shortfall has been reduced, the state still faces “an extraordinary long-term structural deficit,” said Dane Smith, president of the non-partisan group, Growth & Justice.
“Our budget reserves are tapped, the no-new taxes experiment has failed to produce on promises of job growth and economic strength, local and state governments already have been significantly downsized and disinvesting in Minnesota’s people and places is diminishing our celebrated quality of life.”
Smith urged lawmakers to work toward goals of fairness and long-term growth.
“After the new forecast’s dismal numbers were heard, Governor Pawlenty announced he is sticking with his plan which would deepen Minnesota’s recession further by piling on public sector job loss onto private sector job loss,” Wayne Cox, executive director of Minnesota Citizens for Tax Justice, said Tuesday.
“His cuts would weaken Minnesota’s economy by disinvesting in the state’s colleges and universities where the jobs of the future are incubated. Instead he would throw more Bush-style tax cuts to businesses without any requirement to their creating a single new job.
“The legislature needs to fine more cost-effective solutions—ones that kills fewer jobs and prepares the state better for the future.”
This article includes information from a report in Session Daily, a publication of the Minnesota House.
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Union leaders and other advocates urged lawmakers to put an emphasis on job creation and avoid damaging cuts as they address the shortfall.
In the budget forecast issued Tuesday, Management and Budget Commissioner Tom Hanson said that despite diminishing tax revenues to the state, the budget hole that legislators and Governor Tim Pawlenty now face is better than the November forecast’s prediction of a $4.8 billion shortfall. He said $1.8 billion of medical assistance funds from the American Recovery and Reinvestment Act can essentially be subtracted from the real deficit figure of $6.4 billion.
Additionally, Hanson said another $800 million in stimulus funds are available for education and other budget priorities, but the Legislature and Pawlenty will have to agree on whether and how to use those funds.
Giving an update on the economy, State Economist Tom Stinson warned that the state faces the “longest and deepest recession since World War II.” He said even after an economic recovery begins — possibly sometime next year — it might be 2012 before Minnesota recovers the jobs it will have lost in the current economic crisis.
Reacting to the forecast, the governor said his office would release revised budget proposals soon. He also reiterated his opposition to fixing the deficit with tax increases.
“If they plan on raising taxes, we’re going to have a collision,” Pawlenty said of DFL legislators.
But House Speaker Margaret Anderson Kelliher responded that budget discussions should focus on long-term solutions, not just fixing temporary shortfalls with one-time money.
“All options are on the table. That includes revenue,” Kelliher said.
Union leaders concurred. In a joint statement, Minnesota AFL-CIO President Ray Waldron and the leaders of the state’s six Regional Labor Federations called for a stronger focus on rebuilding Minnesota’s economy.
“As the state’s economy worsens, our support for a state budget built around the goal of preserving existing jobs and creating secure family-supporting jobs is growing even stronger,” they said.
“It is clear that we will not jump start the economic recovery or create and preserve good jobs simply by cutting the state budget. With six Minnesotans competing for every open job, it is foolish to add to the human costs of this recession by cutting public services and public sector jobs.
“Efforts to balance the budget by slashing pubic services will cause additional hardship to families throughout Minnesota. We attended the Legislative Budget Hearings in our regions and it’s clear that Minnesotans need and want the state to take bold action to rebuild our economy and to preserve and create sustainable, good paying jobs. We urge legislators and the governor to include raising revenue fairly, based on the ability to pay, in their plans for resolving the state’s financial crisis.”
Even with though the size of the projected shortfall has been reduced, the state still faces “an extraordinary long-term structural deficit,” said Dane Smith, president of the non-partisan group, Growth & Justice.
“Our budget reserves are tapped, the no-new taxes experiment has failed to produce on promises of job growth and economic strength, local and state governments already have been significantly downsized and disinvesting in Minnesota’s people and places is diminishing our celebrated quality of life.”
Smith urged lawmakers to work toward goals of fairness and long-term growth.
“After the new forecast’s dismal numbers were heard, Governor Pawlenty announced he is sticking with his plan which would deepen Minnesota’s recession further by piling on public sector job loss onto private sector job loss,” Wayne Cox, executive director of Minnesota Citizens for Tax Justice, said Tuesday.
“His cuts would weaken Minnesota’s economy by disinvesting in the state’s colleges and universities where the jobs of the future are incubated. Instead he would throw more Bush-style tax cuts to businesses without any requirement to their creating a single new job.
“The legislature needs to fine more cost-effective solutions—ones that kills fewer jobs and prepares the state better for the future.”
This article includes information from a report in Session Daily, a publication of the Minnesota House.