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Friday, November 30, 2007

Economic Forecast for Minnesota

You can find the November 2007 Economic Forecast at Minnesota’s Department of Finance. A budget deficit of $373 million is now projected for the biennium. Previously a balance of $294 million had been expected.

House Minority Leader Marty Seifert held a brief media response to the budget forecast. His comments include:

We do not need tax increases.

Sacrifices need to take place. The question being asked is who is doing the sacrificing? Republicans believe sacrifices need to take place within government. Democrats believe sacrifice happens with businesses and families.

Republicans and Governor Tim Pawlenty brought fiscal discipline to the legislative process last session. Without the Governor's line item vetoes, bonding bill vetoes the budget deficit could have been more than $500 million. We need fiscal accountability. The Democrats should stay within the debt limit of $965 million for the bonding bill. The bonding bill should be focused on infrastructure like roads and bridge. It would be irresponsible to blow that limit and put that much more on the state credit card.

All levels of government must live within their means — state, county and local.

The House GOP will look toward cuts in government spending to resolve this budget deficit. We talk about fiscal restraint but we need cuts in wasteful spending. FY2010-2011 has a projected major deficit. We need to prepare and get spending under control.

We will again bring fiscal discipline to session. There should be no permanent spending with one-term money, the bonding bill should stay within the debt limit and we don't need to raise taxes.

Sen. Dave Senjem also responded:

This is a wake up call.

We live in a highly taxed state. Our business climate is suffering. We rank 42 in the nation for business climate. We need to create investments in our business climate. We should be in the top 10. Business expansion is not happening in Minnesota because there are no incentives to grow business.


This is good advice from our Republican leaders. By incentives, I assume Senjem means cutting government regulation and taxes that drive businesses out of the state. Minnesota needs to compete in a world economy. More importantly, Minnesota must compete with all other states. If Dems keep creating a deleterious climate for business, they will leave for other states that do not make business unprofitable.

We keep hearing the ads from Sioux Falls begging for business to leave Minnesota’s high tax rate behind. That’s not good for Minnesota, but Sioux Falls doesn’t realize it’s creating its own growth problems with congestion and the need for ever more infrastructure.

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