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Governor Dayton’s Statement on the November 2011 Budget Forecast

December 01, 2011

Today, Governor Mark Dayton released the following statement on the November 2011 Budget Forecast:
 
“This forecast is terrific news for Minnesota.  It is especially encouraging, because our state’s economic improvement has occurred despite a lagging national recovery.  By several key measures, Minnesota has returned to its accustomed place of leading the nation’s economy, rather than lagging behind it, as during the previous few years.
 
“Total wages for 2011 to date have increased by 4.8% in Minnesota, compared to 4.0% nationwide.  Last year, our state’s total wages increased by 2.8%, compared to the country’s 2.0%.  Our current unemployment rate of 6.4% is well below the national 9.0%.  There are still 192,000 Minnesotans unemployed; so this is no time for rejoicing.  However, there are 53,000 more Minnesotans working today than were at the bottom of the “Great Recession” over two years ago.
 
“I am particularly pleased at our success in controlling health care spending.  Department of Human Services Commissioner Lucinda Jesson and her team have done an outstanding job of reducing expected costs.  Their success is expected to save our state $308 million in the current biennium.
 
“On the other hand, this improvement in Minnesota’s fiscal outlook has come at an unnecessarily high price.  Republican legislators’ devotion to protecting millionaires from paying their fair share of taxes comes at the expense of everyone else.  Home owners and business owners throughout our state are facing crushing property tax increases, due to the Republicans’ insistence on cutting Local Government Aid and eliminating the Homestead Credit.
 
“The state has borrowed an additional $700 million from our public schools and another $700 million from future revenues.  Those one-time gimmicks will cause a significantly greater structural deficit in the next biennium than my balanced budget proposal would have produced.
 
“I will not recommend any adjustments in this biennium’s budget until after next February’s forecast.  I note that a year ago, the predicted deficit changed by over $1 billion in just those three months.
 
“I am hopeful, however, that continuing improvement in that forecast will permit us to accelerate our schedule for repaying to our schools the money borrowed from them last summer.”
 
Department of Human Services Commissioner Lucinda Jesson added: 
 
“The good news today is that we are starting to bend the cost curve on the fastest growing part of the state budget—Health and Human Services—and we are doing so at a time when more and more people are turning to public programs.   Even with more people turning to us for assistance, we have made efforts to do business in smarter, more cost-effective way, and the result is over $300 million in savings, reflected in today’s budget forecast.  These savings are the result of a combination of common sense reforms at the state and county level and support from Federal Health and Human Services programs.
 
“The spending savings of $308 million we see today reflects, in large part, changes in the way we do business. Given the demographic challenges that are ahead of our state, we know that we must continue to redesign our programs so that we can continue to provide cost-effective quality care and protection for our most vulnerable citizens.”