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State Deficit Shrinks by $1 Billion.

On Monday, state economist Tom Stinson and Management and Budget Commissioner James Schowalter announced a $1.16 billion reduction off Minnesota’s projected budget deficit. While this doesn’t mean Minnesota is out of the woods, it is a positive step forward to balancing our state’s budget.

Stinson and Schowalter credited the federal stimulus legislation and early Medicaid expansion as reasons for the improvement. The stimulus package strengthened the national economy and “averted a much more severe and deeper recession.” Almost all of the reduced expenses come from reductions in health and human services spending because of Governor Dayton’s decision to enroll in early Medicaid expansion, a move opposed by Minnesota Republicans.

With smart, thoughful solutions to our budget deficit, we can get Minnesota back on the right track. The new and improved February forecast shows that Governor Dayton is staying true to his campaign commitment to make Minnesota better. In response to this news, Governor Dayton has revised his budget to restore proposed cuts to fire safety training and nursing homes and increase R&D credit.

Governor Dayton knows how to make tough decisions to get Minnesota back on track, and made sure to restore funding to Minnesota’s priorities when the budget forecast improved. He has proposed a fair and reasonable solution to the budget deficit, focusing on revenue increases as well as budget cuts. State economist Tom Stinson said that the Republicans plan to cut their way to solving the budget deficit would be more problematic than Governor Dayton’s plan to use a mix of revenue increases and necessary budget cuts.

Governor Dayton continues to lead Minnesota in the right direction while Republicans in the legislature propose the same cuts-only approach that even the state economist says is a problem.

Photo credit: AFL-CIO

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