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Pioneer Editorial: State needs to budget for future

Tuesday's state budget forecast comes as a good news/bad news story.

First the good news. The now projected deficit for the next biennium is $4.57 billion, down from the $4.83 billion that was projected in the November budget forecast.

The economy didn't get any better -- the lower forecast is thanks to the federal economic stimulus package pushed by President Barack Obama. State officials say that package will provide $1,82 billion to the state budget's bottom line. The monies are locked into categories, such as for road and bridge construction or for softening the blow of Medical Assistance increases, but nonetheless means nearly $2 billion to filling the deficit gap.

Without the federal aid, the state budget deficit for the next biennium would have been $6.93 billion -- a figure we've been quoting for quite some time as the economy continues to sour.

Lawmakers may be breathing a little easier, knowing that they won't have to fund more than $6 billion in spending cuts, higher taxes or both. Still, $4.5 billion remains a daunting figure and there will be no easy, politically acceptable solution.

But it's the bad news that worries us.

The federal stimulus funds are only one-time funds. The failure to deal with the state's long-term structural budget problems will leave even a deeper hole for lawmakers two years from now.

The budget forecast predicts a gloom economy well into 2010, with the national gross domestic product declining 2.7 percent in 2009. As a result, the picture for the next two-year state budget -- 2012-13 -- remains glum. The forecast predicts a structural budget gap of $5.1 billion for the 2012-13 biennium, not including inflation, which would boost that figure to $6.49 billion. Revenues for that biennium are projected at $34.2 billion, while adjusted spending is pegged at $39.4 billion.

We urge lawmakers not only to fix this budget, but keep an eye on the next budget. The Legislature took a first step last week in sending to Gov. Tim Pawlenty a bill that would require the Legislature and the governor to balance the state budget for four years, not just one two-year budget cycle. The move would make lawmakers and the governor think more long-term, and not just expediently solving a short-term budget by shifting spending forward or by moving a structural budget problem forward.

Transparency and accountability are currently big buzzwords for government, and crafting an honest budget that doesn't saddle a future Legislature with today's problems would be a good start.