A new report says Minnesota will face long-term budget problems as the population ages.
The State Budget Trends Study Commission is calling for fiscal discipline to smooth out boom-and-bust budget cycles.
The Legislature established the commission in 2007 to analyze state spending and taxes.
Its final report warns of a long-term structural problem in the state budget, with spending outpacing incoming tax revenue as aging baby boomers use more medical care but pay less in taxes.
The 15-member commission recommends lawmakers limit future budgets to the amount of ongoing revenues, and no longer use one-time money or budget shifts.
The report suggests balancing the budget over a four-year period rather than the current two years. It also wants the budget reserve increased to $2.1 billion to provide an adequate cushion over a four-year period.
Commission co-chairman Jay Kiedrowski says the report will help lawmakers manage the next recession, not the current state budget deficit.
"We think this is the game plan. The Legislature and the governor now need to execute this over the next four or five years, to get Minnesota into a position where the next recession doesn't cause a crisis. That's the goal," said Kiedrowski.
DFL House Speaker Margaret Anderson Kelliher says the report offers many sound fiscal ideas. House and Senate committees are scheduled to discuss the report later this week.
(The Associated Press contributed to this report)