Tribune staff editorial

The plan by both the Minnesota House and Senate to rid the state of its $1.

Friday, February 01, 2002

The plan by both the Minnesota House and Senate to rid the state of its $1.95 billion deficit doesn’t seem to provide long-term solutions.

But then again, the recession Minnesota and the rest of the country is in isn’t expected to be a long-term problem.

Essentially every economist has predicted that though it might not be a rapid recovery, the U.S. is expected to pull out of the recession. And of course, the recession – which leads to fewer jobs and fewer sales, thus fewer taxes to collect – is the primary reason why Minnesota’s government is in deficit.

Both the Senate and the House have proposed to solve the deficit by spending budget reserves, cash flow accounts and by borrowing on next year’s tax collections to make the budget balance. Thus, the tax cuts passed last year, and spending levels which the state operates at, would remain intact.

Of course, there are dangers with such a plan. In the mid-1980s, the Legislature used budget reserves and accounting &uot;tricks&uot; to balance the budget, and it resulted in long-term problems which only have been solved in recent years.

However, Minnesota certainly has shown it can support the legislature’s current budget, and will pull out of the recession. It seems the logical choice, then, for the legislature to quickly pass bills to rid the state of the deficit, and wait for a late February forecast to determine a long-term direction.

If, however, the February forecast suggests a deficit will continue at the current spending and taxing levels, the legislature will have to change its gears and consider more painful options.