Denny McNamara Viewpoint: Despite deficit, state's economic projections positive
Recently, state economists released Minnesota's latest budget projections. From my perspective, it is mostly good news.
The numbers show a $1.3 billion surplus for the current biennium which ends June 30, 2013, (which by law will now go to further pay down the "school shift") and a projected $1.1 billion deficit for the two years beginning July 1, 2013.
While the media only talks about the $1.1 billion projected deficit for the 2014-2015 biennium, let's set the facts straight.
When the Republican-led Legislature took over in 2010, the DFL gave us projected deficits of $6.2 billion in 2012-2013 and $4.5 billion for 2014-2015. Schools were owed $2 billion in delayed or "school shift" payments, and we were only left $9 million in budget reserves and $266 million in our cash flow account.
Now, just two years later, the Republican-led Legislature erased the $6.2 billion deficit that had been projected for the current biennium, restored an additional $635 million dollars in our budget reserves and added another $89 million to our cash flow account, paid back our schools all the money shifted in 2011 as well as $900 million of the $2 billion owed from the DFL-led years.
As for 2014-15, that projected $4.5 billion deficit is now down to a manageable $1.1 billion. Even though we used some of the tobacco settlement bonds to help balance the last budget, we still have had nothing but positive economic projections for the past calendar year -- trends that could continue unless the federal government jumps off the fiscal cliff.
I certainly think we should feel good about the economic status of our state as we go from a GOP- to DFL-led legislature. Hopefully lawmakers can show some spending restraint as we did the past two years. If so, the new legislative majority should have relatively few problems balancing this budget. Stay tuned.
As always, I welcome your legislative thoughts and concerns. Feel free to contact me anytime at email@example.com or 651-437-2597.
McNamara represents Senate District 54A.