Let us all feel just a little bit better with the release of the new Minnesota economic forecast. As expected, the state’s projected budget deficit for 2006-2007 shrank somewhat &045; from $700 million in December to $466 million today.

That represents a notable improvement. Not only is the deficit one-third better than it was previously, but it’s the largest improvement from forecast-to-forecast since November 2000.

The challenge now is to maintain our sanity. The numbers should not cause us to become overly optimistic, nor overly pessimistic.

We cannot throw caution to the wind and ignore our good sense, releasing our commitment to sound money management so that steady improvement grinds to a halt. Likewise, we should not prefer to see the glass as half-empty when the improvement is obvious.

Reaction in St. Paul is predictable. Republicans express glee at what they see as Gov. Tim Pawlenty’s sound management. Let their partisan reactions be temporary. There is still much work to be done.

Some Democrats are overly pessimistic. House Minority Leader Matt Entenza’s comment, &uot;red ink as far as we can see,&uot; is a bit untimely given this week’s news.

We believe the good news allows for more options &045; perhaps a new opportunity for legislators to work together to cobble together a long overdue change for educational funding. But be wise, be forward-thinking. Move smartly, so that the numbers continue moving in the right direction.

&045; Daily Globe (Worthington)