A new planning estimate showed a rapid evaporation of the state’s projected surplus.
Minnesota lawmakers are facing a potential $4.7 billion deficit in the next two-year budget as the coronavirus pandemic continues to gobble up more resources than the state gets in revenue.
Minnesota Management and Budget Commissioner Myron Frans said in a new planning estimate Friday that the pandemic has made economic conditions “extremely volatile.” The revenue update, he added, “gives us more information about the budget problems we need to solve during this current biennium and the next.”
The updated numbers for 2022 and 2023, coming ahead of a state bond sale, continue a stunning deterioration of the state’s finances in a matter of months. A February economic forecast showed the state had a projected $1.5 billion budget surplus for the remainder of this budget cycle, which ends July 2021. But a May budget update showed the state now faces a $2.4 billion deficit this budget cycle.