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Pioneer Editorial: Long-term budget fix first priority

The state's latest budget forecast, released Thursday, shows the budget deficit slipping even further into the hole than last forecast last February -- now standing at $6.2 billion or nearly $600 million more than the $5.6 billion forecasted earlier.

The Legislature will have its work cut out for it when it convenes next month to figure out the next two-year state budget. But at least the good news is the current biennium ending June 30 will end with a surplus -- $399 million -- so there won't have to be any emergency budget measures, such as unallotment, needed yet this month to assure a balanced budget at mid-year. That surplus, however, should be allowed to roll over into the next biennium as the start of a budget reserve -- as the current budget reserve was near-depleted in order to seek a balanced budget.

The $6.2 billion budget deficit amounts to 16 percent of a $38.5 billion two-year state budget -- and Republicans and Democrats are already at opposite ends of the spectrum. Democrats, including governor-to-be Mark Dayton, are calling for additional revenues by taxing the wealthy more. Republicans are talking about cutting spending to match the expected $1.5 billion in expected new revenues, and proposing cutting corporate taxes to help spur the economy.

An oft-repeated line through the campaign bears repeating again: You can't cut your way out of this deficit, nor can you tax your way out of it. An even deeper deficit now mandates a balance between cuts and taxing.

Projected spending at a 27.5 percent growth, or $8.3 billion, can't be allowed to continue but where do the numbers come from? The state has borrowed $2.3 billion from school districts that must be repaid or else local property taxpayers will through higher taxes, and $2.3 billion in federal stimulus spending was only one-time funding.

Not improving K-12 funding will mean less state funding per student, as student populations grow. And, with baby boomers aging, the demand for state-subsidized health care and nursing care for the elderly is climbing. The demographics are not the same; freezing funding will mean fewer services as service demand increases.

We do have a structural budget problem, and lawmakers need to look to the future to solve the current mess. Delaying payments or borrowing won't solve the long-term problem. Neither will deep spending cuts, as that will just push the problem to future generations as they deal with a Minnesota quality of life that will continue to diminish.

Minnesota voters may have sent a signal in the recent election for a smaller government, but we don't think that they meant that it comes with a lesser quality of life for those most vulnerable.

But it is clear that voters want something done to correct the long-term problem other than stalemate.