Right back where we started: Forecast illustrates the folly of budget gimmicks

About an hour ago, Minnesota Management and Budget released their November Forecast. The forecast was a bit confusing, with a complicated mix of good and bad news. Here's the short version: Despite an improving economy and higher-than-forecast revenues in FY2012-2013, we're right back where we started with a $1.1 billion deficit.

Budget Commissioner Jim Schowalter summed things up succinctly at the opening of his press conference,saying "There is no relief in sight for our fiscal woes." Ouch.

Actually, there is some good news from the 2012-2013 biennium. We're forecast to end the biennium with a $1.3 billion "surplus." But it's not a real surplus, since it will immediately go to pay down the $2.4 billion school shift. And to put that good news into perspective, the last legislature borrowed $1.4 billion to "balance" the budget.

That means the good news in 2012-2013 wasn't quite enough to offset the previous legislature's irresponsible budget. GOPers in the last legislature spurned Governor Dayton's efforts to increase revenues, relying instead on one-time funds and borrowing to "balance" the budget. The result is that we're left with yet another deficit hanging over our heads. Those temporary measures got us through one more biennium, but did nothing to fix the long-term structural problems of our budget.

It gets worse when you consider that the $1.1 billion shortfall cited in the forecast isn't the complete picture. On top of that $1.1 billion, we owe our schools an additional $1.1 billion. And don't forget inflation, as I warned earlier today. According to the forecast, we'll need to spend an additional $890 million to keep up with inflation. All told, that leaves us $3.1 billion in the red. And that $3.1 billion reflects our deficit after several years of harsh cuts to state services that need to be restored.

It's time to put an end to the constant budget problems that have plagued our state for over a decade now. We need a permanent increase in revenues that will allow us to restore state services, pay off our debts, and finally stabilize the budget.

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