How bad is the budget going to be at the state Capitol in January? Bad. Nan Madden at the Minnesota Budget Project writes on her blog today that Gov. Pawlenty has sent instructions to state agencies to plan for a 5-percent reduction in their general fund spending. That’s about $1.8 billion.
She thinks the governor’s budget will include steeper cuts in some areas, less in others. And she doesn’t think that the budget deficit — the size of which will be unveiled next month — will be closed just through cuts.
While I would assume that the Governor’s FY 2010-11 budget will try to address the budget deficit through a significant and painful amount of cuts, that does not mean the deficit will be made up entirely through cuts. We’re likely to see one-time savings through timing shifts, such as delaying payments to school districts. This move has been done to address past deficits, and its use in the 2009 Legislative Session seems quite probable.