12/3/2003 -- NEWS RELEASE -- State Representative Al Juhnke
rep.al.juhnke@house.mn
281 State Office Building, St. Paul, MN 55155
651/296-6206
3951 Horizon Hills Circle, Willmar, MN 56201
320/235-4442
JUHNKE: FORECAST SHOWS MINNESOTA ECONOMY STILL LAGGING
Minnesota's economy continues to sputter despite Republican economic and budget policies, state Rep. Al Juhnke said after a new budget forecast shows the state still faces deficits over more than $600 million in the next three years.
"The simple fact is that the Minnesota economy is not creating jobs and not creating wealth for
its citizens under the Republican 'no new taxes' approach," Juhnke, of Willmar, said. "So it's up to
the governor to tell us whether he wants to make more cuts to things like education, transportation, ethanol and extension services, or to raise more fees. This budget was designed and passed by Republicans, and it has not delivered as they promised last year."
The new budget and economic outlook issued by the Finance Department Wednesday shows the state still has a $185 million deficit for the 2004-05 budget period. But more worrisome - and dangerous - is the prediction of another $440 million deficit in the 2006 budget, as result of payment delays, shifts and accounting gimmicks used to balance the 2004-05 budget. But the report is also misleading in that it makes no provision for inflationary cost increases - and factoring in inflation means the real deficit in the next three years could be $1 billion or more, Juhnke said.
"What's most revealing in this report is that income tax collections are running $490 million below estimates for 2004-05, and sales taxes are down $124 million," Juhnke said. "That's a direct result of the loss of jobs and income that Minnesotans have suffered in this recession. Even people who still have jobs have taken pay cuts or lost benefits like health care. It's a sign our economy is still
sick."
Another revealing statistic is that the state will face an additional $145 million of costs for Medical Assistance in 2006-07 as a result of the cuts to the MinnesotaCare insurance program this year.
"People are being forced off MinnesotaCare - where they pay premiums - and onto Medical Assistance 'welfare' because of the new limits on MinnesotaCare benefits," Juhnke explained. "There are at least 3,000 families who will be put on welfare and impoverished by the MinnesotaCare cuts."
