Dec 5 Minnesota faces a nearly $1.1 billion deficit in its upcoming two-year budget, mainly due to nonrecurring measures that were used to balance the current budget, according to a forecast released on Wednesday.
The state issued tobacco bonds and delayed state aid payments to school districts to help eliminate a $5 billion hole in its current budget. While the fiscal 2012-2013 budget is projected to end the biennium in the black, the ending balance will be used to reduce the amount of shifted school payments to $1.1 billion from $2.4 billion, the forecast released by the Minnesota Department of Management and Budget said.
For the fiscal 2014-2015 biennium that begins July 1, Minnesota is projecting revenue at nearly $35.8 billion, an $849 million increase over the current biennium.
In the absence of a solution to the U.S. "fiscal cliff" problem, which would lead to higher taxes and big federal spending cuts next year, Minnesota's revenue for the upcoming biennium could be about $1.75 billion lower than projected, according to the forecast.