Minnesota budget forecast shows slight dip

Ceria Alfonso
Diciembre 6, 2017

State budget officials and economists released the November economic forecast Tuesday morning, showing "significant risk" in the budget for the final year of the 2018 and 2019 biennium.

Minnesota's top budget official says lawmakers shouldn't rush to fill a projected $188 million budget shortfall with the state's rainy day fund.

Dayton said the gap was due to various factors, including tax cuts passed by the legislature and uncertainty over federal tax changes now before the U.S. Congress.

The deficits are based on a reduced USA economic growth forecast and the impact of legislation passed during the controversial 2017 session, says the November forecast issued by Minnesota Management and Budget.

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"Today's forecast is a reality check", MMB Commissioner Myron Frans told reporters. That deficit would grow to roughly $586 million in the next three years. In the end, the Republican-controlled Legislature and Democratic Gov. Mark Dayton approved a two-year budget with some of each.

The state's economic officials were expected to explain the deficit Tuesday afternoon.

That uncertainty looms large over Minnesota's scheduled economic forecast due Tuesday. The forecast assumes that no tax bill will be passed at the federal level despite passage in both the House and Senate last week, and assumes 2.2% GDP growth in 2017 despite 3.1% growth in the second quarter and 3.3% growth in the third quarter.

Legislators don't convene until February 20, and an updated forecast will be released shortly thereafter.

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