State's budget deficit could double

House Speaker Margaret Anderson Kelliher
House Speaker Margaret Anderson Kelliher, DFL-Minneapolis, discusses the state's projected $373 million budget shortfall.
MPR Photos/Tom Scheck

State finance officials will release the latest economic forecast on Thursday. In November, the forecast projected a $373 million budget deficit by the middle of 2009.

Gov. Tim Pawlenty said he doesn't know what the new forecast will show. But Pawlenty said he's preparing for a deficit that's two to three times larger than in November.

"That's going to require the state to tighten its belt just like families are having to do, and small business and others are having to do, and to get our budget into balance," Pawlenty said. "And unlike the federal government, we actually have to balance our budget, which is a good thing. We have a constitutional requirement to balance our budget."

Pawlenty ordered a state government hiring freeze last week in preparation for the larger shortfall. DFL legislative leaders say they have already begun looking at potential budget cuts.

Senate Assistant Majority Leader Tarryl Clark, DFL-St. Cloud, said she expects the February forecast to show the projected shortfall has at least doubled in size. She said Senate budget committees will be looking at options.

"We don't anticipate at this point that the governor is going to have a solution that would perhaps have some tax fairness in the mix," Clark said. "So they're looking at what would happen if you just made straight cuts."

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