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Minnesota budget picture better, but not by much

ST. PAUL - Minnesota's current budget picture is a bit brighter than three months ago, but the next budget could be the state's biggest-ever financial challenge.

ST. PAUL - Minnesota's current budget picture is a bit brighter than three months ago, but the next budget could be the state's biggest-ever financial challenge.

The current budget is $944 million short, state officials announced Tuesday, but depending upon what legislators and the governor do in the next few months, the budget that begins in mid-2011 could end up with an $8 billion hole. The best scenario for the 2011-12 budget is a

$2.8 billion deficit.

In early December, those same state officials predicted a $1.2 billion budget deficit in the current

$31 billion, two-year budget. Slightly better revenues and less spending improved the picture.


Most of the $184 million in lower spending came in health programs for the poor, about half of which was due to unanticipated federal money flowing to Minnesota. Tuesday's budget forecast also figured in $14 million less spending for public schools, largely due to declining enrollments.

While corporate taxes brought in $181 million more than expected, individual income taxes are now expected to drop

$874 million.

"The big story is what didn't happen ...," State Economist Tom Stinson said. "It's pretty much the same forecast we did before."

Republican Gov. Tim Pawlenty said he is thankful for the slightly better forecast, but Democrats who control the Legislature used the news, especially that of the next budget, to beat up on Pawlenty.

Pawlenty said budget proposals he already has announced would cure the current budget problem, with the 2011-12 deficit shrinking to $2.8 billion under his plan. Officially, the next budget faces a

$5.8 billion problem, but legislative decisions could boost it to $8 billion, said State Budget Director Jim Showalter.

Democrats credited federal money for making Pawlenty look better, along with the governor's proposals to delay school and other payments into future budgets.


Senate Majority Leader Larry Pogemiller, DFL-Minneapolis, said the next budget's problem is a major concern, and said Pawlenty is not paying attention to it.

"Is Minnesota better off as Tim Pawlenty leaves office?" he asked. "The answer is a resounding 'no.' "

Pogemiller said Democratic legislative leaders plan to pass a series of budget-cutting bills, beginning in the next two or three weeks. The first phase will include cuts to higher education, environment, state government, agriculture, veterans, public safety and courts programs.

The second bill, which he hopes can pass later this month, would cut health care spending, with the final budget-cutting bill dealing with local government aids and public school education.

Committee to decide on lifting nuclear ban

ST. PAUL - The Senate energy and utility committee will decide Thursday if it supports lifting a Minnesota ban on new nuclear power plants.

Supporters said nuclear power provides a clean, cost-effective option that would create hundreds of construction and permanent jobs. Opponents cited the cost of construction and storage concerns.

- Andrew Tellijohn, Forum Communications Co.


Davis reports for Forum Communications Co.

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