MINNEAPOLIS (AP) — The COVID-19 pandemic is projected to take a nearly $4 billion bite out of Minnesota’s budget, swallowing up its rainy day fund.
Budget officials now projects a $2.4 billion deficit for the current two-year budget. That compares with a projection just nine weeks ago of a $1.5 billion surplus.
The projected deficit is just slightly larger than Minnesota’s budget reserve, which can help cover the hole. But Budget Commissioner Myron Frans cautioned against relying solely on that to close the gap.
Gov. Tim Walz says he’s not ready to rule anything out - including layoffs and furloughs of state employees.
"Minnesota’s budget and economic outlook has significantly worsened since the coronavirus pandemic. A deficit of $2.426 billion is now projected for the current biennium, which is almost a $4 billion change compared to the February forecast. Revenues are expected to be $3.611 billion lower and spending, including appropriations enacted since February, is expected to be $391 million higher. The $2.359 billion budget reserve remains available to mitigate the budgetary impact of the crisis. Given the uncertainty about the path of pandemic, the economic outlook will remain volatile for some time," the state said.
Governor Tim Walz issued the following statement in response to the updated 2020 budget forecast:
“Today’s budget outlook confirms what we suspected: COVID-19 will badly damage Minnesota’s economy.”
“As I said during my State of the State address, there is a long winter ahead. COVID-19 is upending life as we know it—and our economy will not be spared.”
“This will mean shared sacrifice among all of us. Hard decisions will be made.”
“But thanks to smart budgeting, Minnesota is in a much better position than other states to weather the storm. We must not undercut what got us there: Investing in our children. Expanding access to health care. Putting Minnesotans first.”
“These last few weeks have been difficult, and it’s only going to get harder.”
“It is more important than ever that we lead with our values and protect Minnesota’s quality of life.”
“Minnesotans will look out for one another. We will help each other back on our feet. We will get through this winter—together—and we will see spring.”
House Minority Leader Kurt Daudt, R-Crown, issued the following statement regarding the budget update released Tuesday:
"Today’s budget update shows that our state is seeing the same financial struggles that families and businesses are facing. Democrat Governors in New York and Wisconsin have already come forward with billions in budget reductions to react to the COVID crisis, and it's time for Gov. Walz to do the same. Families and businesses cannot bear the burden of this crisis alone: government must share in the sacrifice."
The Minnesota Department of Health on Tuesday reported 617 new confirmed cases, the state’s highest one-day total yet. Hospitalizations hit new highs, with 434 patients hospitalized Tuesday, including 182 in intensive care.
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