What will budget forecast bring?

Posted at 6:20 AM on December 1, 2011 by Paul Tosto
Filed under: Economy, Taxes

MPR Photo/Nikki Tundel

Grab head with both hands. Hope for the best.

That's what we're doing this morning as we wait for state officials to release their newest economic forecast with updated revenue and spending estimates.

It's possible the estimates will show a dramatically improved economic picture that automatically eases future problems. The betting money, though, is against that. The Star Tribune reported Wednesday:

With state reserves already tapped out, legislators are bracing for an estimated $500 million to $1 billion in red ink

The state's politicians have a lot riding on the forecast. Another large deficit could signal a savage rematch of the budget battle that engulfed the Capitol early this year and resulted in a record 20-day state government shutdown. The entire Legislature is up for election next year, so many legislators had hoped for a relatively quiet session starting in late January, letting them hit the campaign trail without baggage from a politically bruising budget fight.

The summer budget impasse and state government shutdown was not fun.

We're not saying Thursday's data will bring that on again. But a weak revenue forecast creates all sorts of financial and political problems.

We'll spend today digging into Minnesota state finances and then into the particulars of the latest forecast after it's released late morning.

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