Minnesota faces sudden $2.4 billion budget deficit in COVID-19 fallout
Minnesota budget officials announced a $2.4 billion deficit Tuesday, a stunning reversal of the state’s fiscal picture from two months ago before COVID-19 sent shockwaves through the global economy.
Minnesota Management and Budget Commissioner Myron Frans, MMB Economist Laura Kalambokidis and Budget Director Britta Reitan presented a grim and expedited accounting of the massive hit to Minnesota’s finances, giving state legislators an overview of how the budget picture changed by nearly $4 billion since late February.
A surge in unemployment and an uncertain economic future has caused a drop in consumer spending, which typically comprises roughly two-thirds of economic activity. The state’s Department of Employment and Economic Development now reports nearly 600,000 Minnesotans have filed for unemployment insurance since the start of the pandemic in mid-March.
The budget forecast sets the stage for the final two weeks of the legislative session, which has already been complicated by the jarring transition of converting to virtual committee hearings amid curtailed operations at the Capitol. The forecast now unlocks a nearly $2.4 billion budget reserve, created in 2014 to help the state weather an economic downturn and potentially stave off deep cuts to government services.
Read more: https://minnesotareformer.com/2020/05/05/minnesota-faces-sudden-2-4-billion-budget-deficit-in-covid-19-fallout/
