Governor Tim Walz addressed the expected 2.4 billion dollar shortfall in the state budget saying the state’s past approach to budgeting puts us in the best possible position to power through this crisis.
“Minnesotans have approached budgeting with a very conservative approach. A very forward leaning approach in terms of things that grow the economy. And now is not the time for us to back off on those. Its time for us to make hard decision, but to be thoughtful on how we do this.”
Management and Budget Commissioner Myron Franz says the state’s rainy day fund can be tapped to help ease the budget strains, but that step should be taken with caution.
“Depleting these funds in this current situation is difficult because we know revenues are going to continue to decline during the remaining 14 months. And there are many factors with a high degree of uncertainty about today’s budget projection.”
Earlier this year the state had a projected budget surplus, that has been wiped out because of COVID-19 related spending as well as dramatic decreases in sales and income tax collections.
Franz says the state’s rainy day fund could be tapped at this time.
“With this projected budget deficit the governor has the legal authority to use the reserve to restore budget balance. We need to be cautions, target and focused on the choices we make to balance the biannual budget.”