Report from Minnesota Budget Trends Study Commission
Minnesota budget trends study says changing demographics require revised state financial system (Kimball, 01/12/2009, MinnPost):
The Minnesota Budget Trends Study Commission, co-chaired by Kevin Goodno and Jay Kiedrowski, was established by the Legislative in 2007 to study the impact of Minnesota’s changing demographic trends on the long-term stability of state budget conditions. Released on January 12, the commission’s report summaries some primary findings, including:
❑ Minnesota is currently experiencing a major, long-range demographic shift;
❑ Despite continuing to rank high among many key social and economic indicators, Minnesota’s economy has underperformed recently relative to the nation;
❑ Minnesota has a long-term structural budget problem, with long term expenditure growth likely to outpace revenue growth;
❑ Health care growth will become the most important factor in controlling rising state expenditures;
❑ Adjusting the mix of state taxes, while leaving tax base and revenue growth rate neutral, cannot significantly reduce revenue volatility without a radical change in tax rates and a dramatic re-weighting of tax revenue sources to the system;
❑ Minnesota’s statutory budget reserve ceiling has not grown to an appropriate level to adequately manage the underlying risks in Minnesota’s tax system over time.
More related information can be found through the website of Budget Trends Workgroup.