Minn. budget deficit expected to rise, some say to $7 billion

State lawmakers say they're expecting the budget deficit to grow larger this week.

A new economic forecast comes out Tuesday. Three months ago, state finance officials released a forecast that projected a $4.8 billion deficit for the next two-year budget, as well as a shortfall in the current biennium.

Senate Republican Minority Leader David Senjem of Rochester said he thinks the deficit could grow to $7 billion.

Senjem said the Legislative session is nearing the halfway point and there's little to show for it.

"Last year, I think we had a $925 million budget deficit, and it took 10 days in the cave so to speak, down at the governor's office, to resolve that," Senjem said. "It will take a lot of time to resolve this one."

DFL House Speaker Margaret Anderson Kelliher of Minneapolis said she is bracing for a worsening financial picture and preparing to make some tough budget decisions.

"We're going to go from sort of a hole to a canyon in terms of what we're facing," Kelliher said. "And the question is, how deep is the canyon? And where is the bottom? And how do you start to fill that hole back up in the state budget."

Kelliher said Minnesota's share of the federal economic stimulus bill will help the state. But she says it won't fundamentally change the budget situation.

DFL Senate leaders say Minnesota's share of the federal stimulus money will help ease some of the budget pain for the next two years, but they say the following two years could show an even deeper hole.

They have also said all budget-balancing options should be on the table.

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