On Eve of New Economic Forecast, Minnesota Prepares for Further Budget Strains

Democratic-controlled legislatures in the spotlight, facing largest budget shortfalls across the nation

With new data expected to reveal an additional budget gap in the next economic forecast to be released by Gopher State finance officials this Wednesday, numbers recently released by the Center on Budget and Policy Priorities indicate Minnesota has already had to tackle a shortfall in its FY 2010 budget that ranks in the top third largest in the nation.

A sluggish economy is forcing many states, including Minnesota, to address new budget gaps due to revenue that is falling shy of previous projections that had already forced most states to address significant budget deficits in the previous legislative session.

The Center on Budget and Policy Priorities report finds 35 states have already reported mid-year budget gaps, not including Minnesota.

Even before calculating the expected new gap in Minnesota’s state budget, the Gopher State has had to address the 16th largest per capita FY2010 budget shortfall in the nation this year – at $590 per resident – according to a Smart Politics analysis of budgetary and U.S. Census data.

Minnesota’s budget shortfall was the largest per capita in the Upper Midwest, with Wisconsin ranked at #17 nationally ($558 per capita), Iowa at #25 ($398), South Dakota at #48 ($40), and North Dakota one of just two states in the nation which has been deficit-free (along with Montana).

When examining the Gopher State’s shortfall as a percentage of its FY2010 budget (21.0 percent) Minnesota ranks in the middle of the pack (24th largest in the nation).

Overall, Western states are facing some of the largest budget shortfalls with Alaska ($1,872 per capita), California ($1,518) and Oregon ($1,107) ranked #1, #2, and #4 respectively. Hawaii (#8, $895) and Arizona (#10, $783) also rank among the Top 10 states with the largest FY2010 budget gaps.

And what political party is going to pay the price for these ongoing state budget crises?

Democrats have unified control of both legislative chambers in 18 of the Top 21 states with the largest budget shortfalls in the nation.

Alaska (#1, split control), Arizona (#10, unified GOP control), and Kansas (#14, unified GOP control) are the only states in the Top 21 in which Democrats do not control the upper and lower legislative chambers.

Moreover, Democrats did not inherit this budgetary crisis. The Democratic Party had unified control of both chambers in 17 of these 18 states in question prior to the 2008 election, with only the Delaware Senate flipping to the Democrats last November among these states.

Democrats have also controlled 13 of the governorships in these 21 states as these budgets were being created (and revisited).

Minnesota (and national) political observers will be watching to what extent Governor Tim Pawlenty takes a high profile in addressing the new budget gaps facing the Gopher State. Pawlenty’s anti-tax stance played out in a fierce public battle with the DFL leadership last Spring, culminating in both vetoes of tax bills and unilateral spending cuts through his authority to utilize unallotment in balancing the budget.

Largest Per Capita FY2010 State Budget Shortfalls

Rank
State
Legislative Control
Per Capita
1
Alaska
Split
$1,872.90
2
California
Democratic
$1,518.37
3
Connecticut
Democratic
$1,341.72
4
Oregon
Democratic
$1,107.89
5
Illinois
Democratic
$1,107.08
6
New York
Democratic
$1,080.04
7
New Jersey
Democratic
$1,020.16
8
Hawaii
Democratic
$895.07
9
Massachusetts
Democratic
$842.18
10
Arizona
GOP
$783.44
11
Washington
Democratic
$749.01
12
Maine
Democratic
$736.85
13
Rhode Island
Democratic
$707.47
14
Kansas
GOP
$641.60
15
Delaware
Democratic
$629.85
16
Minnesota
DFL
$590.34
17
Wisconsin
Democratic
$558.72
18
New Mexico
Democratic
$504.99
19
North Carolina
Democratic
$492.20
20
Maryland
Democratic
$474.18
21
Vermont
Democratic
$468.96
22
Virginia
Split
$449.42
23
Georgia
GOP
$448.43
24
Nevada
Democratic
$446.01
25
Iowa
Democratic
$398.68
26
Louisiana
Democratic
$390.23
27
Utah
GOP
$385.35
28
Pennsylvania
Split
$381.42
29
Idaho
GOP
$370.40
30
Alabama
Democratic
$348.10
31
Colorado
Democratic
$331.16
32
Florida
GOP
$311.66
33
Ohio
Split
$310.98
34
Kentucky
Split
$281.35
35
Oklahoma
GOP
$273.70
36
Michigan
Split
$268.49
37
Missouri
GOP
$253.29
38
Mississippi
Democratic
$220.43
39
Indiana
Split
$219.02
40
South Carolina
GOP
$208.24
41
New Hampshire
Democratic
$180.43
42
Tennessee
GOP
$176.54
43
Nebraska
Non-partisan
$172.41
44
West Virginia
Democratic
$155.26
45
Texas
GOP
$141.99
46
Arkansas
Democratic
$88.00
47
Wyoming
GOP
$61.55
48
South Dakota
GOP
$40.69
49
Montana
Split
$0.00
49
North Dakota
GOP
$0.00

Note: Per capita data compiled by Smart Politics from Center on Budget and Policy Priorities budget data (data through November 20, 2009) and U.S. Census Bureau 2010 population estimates. Budget data includes both announced budget gaps as well as initial (previously addressed) shortfalls.

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