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Minnesota budget deficit projected to be $1.1 billion

Minnesota's budget picture sharpens Wednesday with a new economic forecast, but there's a big caveat.

Article by: Associated Press

Updated: December 5, 2012 - 9:34 AM

Minnesota is projected to have a 1.1 billion budget deficit for 2012-15, state officials said Wednesday.

The forecast from state finance officials may be outdated by the end of the month, depending on what happens in Washington.

Federal negotiations over a long-term deficit fix will determine whether across-the-board tax increases and automatic spending cuts kick in at the start of 2013.

Failure to reach a deal would send the nation over the so-called fiscal cliff and could prompt a recession.

Gov. Mark Dayton and lawmakers use the forecast as the basis for the next two-year state budget. The last forecast anticipated a $1.1 billion gap starting in mid-2013.

The Democratic governor faces a Jan. 22 deadline to propose a budget to the Legislature. Democrats will take over both chambers Jan. 8.

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