Budget forecast improves; deficit remains

Published 1:08 pm Saturday, March 5, 2011

Column: Rich Murray, Capitol Conversations

The big news at the State Capitol this week was the release of Minnesota’s latest economic forecast. In short, state economists tell us we have a continued state budget deficit, but it’s not as massive as we once expected.

Rich Murray

According to the latest numbers, Minnesota now faces a projected $5.1 billion shortfall for the 2012-13 budget cycle, down from November’s deficit estimate of $6.2 billion.

Email newsletter signup

Better-than-projected revenue collections for Minnesota’s income and sales taxes and capital gains helped improve the budget forecast by $984 million. Economists noted that the slow recovery was aided by Congress’ extension of the Bush tax cuts, which would indicate that consumers and business owners are showing confidence in the economy and are spending money.

On the other hand, the reason we have a projected budget deficit of $5.1 billion is due to out-of-control state government spending. The analysts say state revenue collections are increasing by 8.8 percent. This means we could increase the size of our state government budget from $32 billion to $33.5 billion without batting an eye. The problem is, state spending is projected to increase by an astounding 29 percent over the next two years, a rate that is not only unrealistic but also unaffordable. According to the forecast, the fastest growing spending area of state government is health and human services, which is growing at 44 percent.

This skyrocketing spending growth clearly shows we need to exercise fiscal responsibility and set priorities for how the state spends money. We need to get government spending under control to reassure our job creators that we are serious about reforming government and will not tax them out of business.

While we can be pleased our economic situation has improved somewhat, it’s clear our economic problems are not going away if we do not stop expanding government programs at such an alarming rate. I’d like to think most Minnesotans would say giving state government a 29 percent raise is unacceptable. In the next few weeks, the Minnesota House will craft a bill that recognizes this belief, and will offer a balanced budget that not only lives within our means but will not raise taxes.

Unemployment benefits bill approved

The Minnesota House of Representatives recently approved my legislation that modifies unemployment insurance eligibility and provides an extension for many who remain out of work. The legislation changes the qualifying threshold for federal unemployment benefits, giving 55,000 unemployed Minnesotans assistance for an extra 13 weeks, and is fully funded by the federal government.

The bill also would permit unemployed adult children who worked for businesses owned by their parents to collect unemployment benefits under the same eligibility rules as other unemployed workers.

I’m pleased the bill received strong bipartisan support in the House. We have many people out there who are struggling to locate a job, and this legislation allows them to continue receiving some financial assistance until they find employment.

Please respond to my session survey

With the 2011 legislative session now in full swing, I want to know how you feel about many issues that will likely receive debate at the State Capitol this year. One of the best ways you can share your thoughts is to complete my session survey. You can access my survey online by visiting www.house.mn/27A and click on “2011 Legislative Survey.”

As we move forward, citizen input on these and other issues will be crucial. That’s why I strongly encourage everyone to respond to my session survey. Thank you in advance for your participation.

Have a question or concern? Constituents in District 27A including communities in Freeborn and Mower counties can write to me at 439 State Office Building, 100 Rev Dr. Martin Luther King Jr. Blvd., St. Paul, MN 55155. Or call me at 651-296-8216 or e-mail me at rep.rich.murray@house.mn.

Rich Murray, R-Albert Lea, is the state representative for House District 27A.