The Department of Finance\'s grim February Forecast, released Thursday, predicts a $935 million budget shortfall for the remainder of the 2008-09 biennium.
"The story of this forecast continues to be the weakening U.S. economy," Finance Commissioner Tom Hanson said. He called the situation "very concerning but still manageable."
Union leaders urged lawmakers to consider all options, including selected revenue increases.
"Now that our state\'s budget deficit is nearing a billion dollars, we can expect to hear Governor Pawlenty\'s one-size-fits-all solution to the problem — cut services and cut taxes," said Minnesota AFL-CIO Secretary-Treasurer Steve Hunter.
"That solution just is not working. His previous tax and service cuts have caused real pain for real people and have damaged our state\'s economy. We need to invest in Minnesota\'s future — not strangle it. It\'s time to raise revenues. We need to raise them fairly and we need to raise them now."
Eliot Seide, director of AFSCME Council 5, a union of 43,000 public and non-profit workers in Minnesota, outlined several solutions to address the shortfall.
"Chronic disinvestment has created no new jobs and an economy that doesn\'t work," he said. "Tax fairness can raise the revenue to revive our economy and pay down three-quarters of the annual shortfall. Let\'s get the wealthiest Minnesotans, who earn over $400,000, to pay their fair share of taxes. Let\'s close tax loopholes for corporations that ship our jobs overseas. And let\'s eliminate unfair tax breaks for commercial/industrial properties."
Based on the 2007 tax bill, tax fairness could raise $772 million in revenue as follows, Seide said:
• $452 million – create 4th tier income tax of 9% for filers earning $400,000 or more
• $125 million – subtraction of tax break for foreign operating companies
• $195 million – freeze commercial/industrial property tax levy rate at 2004 level
Seide also urged lawmakers and the governor to use some of the state\'s "rainy day" reserve fund.
"The rainy-day reserve will help sustain the public services that make Minnesota a good place to live, work, and do business," he said.
This article includes information from the Legislature\'s publication, Session Daily.
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The Department of Finance\’s grim February Forecast, released Thursday, predicts a $935 million budget shortfall for the remainder of the 2008-09 biennium.
"The story of this forecast continues to be the weakening U.S. economy," Finance Commissioner Tom Hanson said. He called the situation "very concerning but still manageable."
Union leaders urged lawmakers to consider all options, including selected revenue increases.
"Now that our state\’s budget deficit is nearing a billion dollars, we can expect to hear Governor Pawlenty\’s one-size-fits-all solution to the problem — cut services and cut taxes," said Minnesota AFL-CIO Secretary-Treasurer Steve Hunter.
"That solution just is not working. His previous tax and service cuts have caused real pain for real people and have damaged our state\’s economy. We need to invest in Minnesota\’s future — not strangle it. It\’s time to raise revenues. We need to raise them fairly and we need to raise them now."
Eliot Seide, director of AFSCME Council 5, a union of 43,000 public and non-profit workers in Minnesota, outlined several solutions to address the shortfall.
"Chronic disinvestment has created no new jobs and an economy that doesn\’t work," he said. "Tax fairness can raise the revenue to revive our economy and pay down three-quarters of the annual shortfall. Let\’s get the wealthiest Minnesotans, who earn over $400,000, to pay their fair share of taxes. Let\’s close tax loopholes for corporations that ship our jobs overseas. And let\’s eliminate unfair tax breaks for commercial/industrial properties."
Based on the 2007 tax bill, tax fairness could raise $772 million in revenue as follows, Seide said:
• $452 million – create 4th tier income tax of 9% for filers earning $400,000 or more
• $125 million – subtraction of tax break for foreign operating companies
• $195 million – freeze commercial/industrial property tax levy rate at 2004 level
Seide also urged lawmakers and the governor to use some of the state\’s "rainy day" reserve fund.
"The rainy-day reserve will help sustain the public services that make Minnesota a good place to live, work, and do business," he said.
This article includes information from the Legislature\’s publication, Session Daily.