Minnesota’s next biennium budget deficit is now projected at $4.8 billion, with a new revelation today that we’ve run out of money for the current biennium. That immediate shortfall is nearly $500 million. There’s only about $153 million in the budget reserve fund, so we have a big problem – now.

 

All told, Minnesota is $5.2 billion into the red ink, which represents 14% of the entire budget. Drastic measures will be required to patch this record-setting budget hole. Either huge tax-hikes, deep budget cuts or both are in the very near future. With the exception of possible federal deficit spending for state bail-outs, there are no other options. Governor Pawlenty has already come out against federal deficit spending to close state deficits.

 

The 2004-2005 biennial budget was $28 billion. In the course of 4 years, the legislature has increased spending at a head-spinning pace. The next biennial budget is $36 billion. That’s a spending increase of $8 billion, or 29% since just 2004. It’s no real wonder that we’re facing a record-setting deficit now. That kind of spending growth isn’t sustainable. 

The historical pattern in government is to grow spending during boom years and raise taxes to cover the unsustainable new spending during bust years. This is a deadly cycle that inevitably catches up to the taxpayers. Growth in Minnesota’s government spending has drastically outpaced inflation for years. The time to take a stand against the reckless spend-and-tax cycle is now. Covering a deficit this large with tax increases will accelerate the spend-and-tax cycle out of the stratosphere.

Take Action: Click here to contact your representatives and remind them not to make matters worse with tax hikes when we can least afford them.