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Pioneer Editorial: Key state budget talks open Monday

Most economists say the recession is over, but its ill-effects will be felt for some time. Turning the economy around isn't unlike a harbor pilot in Duluth attempting to turn an ore boat around. Those big boats don't turn on a dime.

Likewise, while corporations and banks are now seeing profit improvements and the Dow inched across 10,000 for the first time in a year, jobless ranks continue to swell and wages actually have dipped. Some states are contemplating decreasing their minimum wage rates in light of a decline in the cost of living.

All does not bode well for the state of Minnesota's biennium budget. The current budget was settled unilaterally by Gov. Tim Pawlenty who used his red pen to make the budget passed by the Legislature work. Worrisome is how to handle the next two-year state budget, which early estimates put at $7 billion in the hole on the day the fiscal 2012-13 two-year budget cycle starts, July 1, 2011.

The DFL-controlled Legislature wants to start now to figure out a state budget and not wait until the final weeks, even if a new governor is of the same party persuasion.

An important process begins Monday with the initial meeting of the Subcommittee on a Balanced Budget, a newly formed panel of the Legislative Commission on Planning and Fiscal Policy.

The panel is chaired by Senate Majority Leader Larry Pogemiller, DFL-Minneapolis, and Rep. Lyndon Carlson, DFL-Crystal. The panel has a full agenda for its first meeting, including an economic and demographic outlook and quarterly fiscal update from State Economist Tom Stinson and State Demographer Tom Gillaspy.

Bipartisan legislative staff will give a budget briefing, including a review of recent spending cuts in Minnesota and an analysis of the impact potential spending reductions during the 2010 session would have on the projected 2012-13 biennium budget deficit under various scenarios.

An October update shows current biennium revenues down 1.7 percent from the February forecast, a situation that could deepen the expected deficit in the next biennium. Predictions are for a long, slow recovery, mostly likely showing as a "U" shape on graphs. The October update shows that economic growth returns, but real gross domestic product ends fiscal 2011 below February's forecast.

While Minnesota lawmakers will grapple with the state's future, Republican Gov. Pawlenty spent this weekend addressing the Western Conservative Political Action Conference in Newport Beach, Calif., and Twittering about the nation's $1.4 trillion year-end deficit and that the "federal government needs to stop spending $$ we don't have."

Have we not heard that before?