Updated: July 31, 2020 06:35 PM
Created: July 31, 2020 06:24 PM
There's good news and bad news from the Minnesota Office of Management and Budget (MMB). Or maybe it's bad news and more bad news.
MMB issued a report Friday that indicates the state's budget deficit, first revealed in May, remains at $2.4 billion dollars in the 2020-2021 biennium. That projection came just three months after MMB reported a $1.5 billion surplus.
Now, a "planning estimate" by the state indicates the budget shortfall could be $4.7 billion in 2022-23.
MMB Commissioner Myron Frans said it's nearly all due to the economic downturn after the COVID-19 pandemic began.
"Today's revenue update gives us more information about the budget problems we need to solve during this current biennium and the next," said Frans. "The planning estimates for 2022-23 will help decision-makers begin the budget planning process as we continue to respond to the pandemic. In keeping with our sound fiscal management principles, the August bonds sales will save taxpayers' dollars with our ability to access lower interest rates."
Governor Tim Walz said his administration and state lawmakers will have difficult decisions to make in the next regular session of the legislature in January of 2021.
"Minnesota is not alone. States across the country are facing large budget gaps during this global pandemic," said Walz. "We have challenges ahead but we will continue to make smart fiscal decisions and request aid from the federal government to help our state manage this difficult time."
MMB said it was required to issue the planning estimate by federal securities law. The state is about to sell bonds and is required to make a full financial disclosure for potential investors.
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