Why can't Minnesota run a deficit?

Tim Pawlenty
Governor Tim Pawlenty said yesterday he and lawmakers will have to make cuts to the current budget, as well, to avoid running a deficit.
MPR Photo/Tim Pugmire

Minnesota's financial situation will become more clear tomorrow. Like the economic news most Americans are getting, the picture is likely to be grim. Predictions see the state with a budget deficit as high as $5 billion for the next budget cycle.

Governor Pawlenty said yesterday he and lawmakers will have to make cuts to the current budget, as well, to avoid running a deficit.

But why can't Minnesota run a deficit? Deficits are par for the course for the federal government and many economists say targeted government spending can help lift the nation out of recession. But Minnesota's constitution prohibits deficit spending.

Minnesota's Commissioner of Management and Budget Tom Hansen sat down with Tom Crann to explain the situation.

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