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Budget forecast looks positive
The latest prediction is out: the state of Minnesota's operating budget is projected to have a deficit of $185 million at the end of the state's 2005 fiscal year.
But in terms of the big picture - the state's massive $28 billion budget - the news could be far worse.
"Basically, the Department of Finance is indicating that we're looking at a deficit of $185 million over two years," said Diana Burlison, SCSU associate vice president for administrative affairs. "To you and I that may sound alarming, but the state has a budget of $28 billion, so a $185 million variance is about a half a percent."
The economic forecast is complied by the Minnesota Department of Finance twice a year - once in November and once in February - to give Minnesota legislators and state administrators an idea where the state's economy is headed in the upcoming few years, and how it will impact the state budget. The forecast considers a number of economic indicators, including the condition of the stock market, unemployment, consumer spending and house buying. Burlison, who is in charge of managing SCSU's $100 million operating budget, said the forecast has proven itself to be a credible source in terms of the budget. This year's forecast appears to be right on target.
"In the five, six years I've been doing it, that's about as close to a revenue forecast as they've come," Burlison said.
The $185 million deficit equates to a proverbial "drop in the bucket" in the state's budget. Burlison said the deficit was not overly concerning, although she said she still planned to monitor future forecasts cautiously.
"I think there's sufficient balance done at the Department of Finance that we shouldn't be impacted by this $185 million deficit and I don't believe we'll see any deallocation this year or potentially next year," she said.
Linda Kohl, Minnesota State Colleges and Universities (MnSCU) associate vice chancellor for public affairs, echoed Burlison's sentiments about cuts.
"The state Department of Finance has said that this should not trigger any major changes in the budget that's been approved, so we're not anticipating any cuts for this year to our budget," Kohl said. "We would be worried if we thought there was a chance that there would be another unallotment or that our appropriation would be cut, but we've gotten no indication that that's being planned."
SCSU is currently in the middle of its biennium, or two-year, operating budget. For the current biennium, Kohl said that $191.5 million in cuts were made across MnSCU schools. News of no more immediate cuts is welcome to Burlison.
"This forecast, even though there's a slight deficit, is actually good news," Burlison said, "because we're not facing what we did two years ago with mid-year cuts because of a state budget problem and then this last biennium with severe budget cuts."
Kohl agreed.
"The indications we're getting is that it looks like things are starting to turn around," she said, "and that will be good news for the system."
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