KEYC - The Latest: Dayton eyes budget tweaks to solve $188M deficit

The Latest: Dayton eyes budget tweaks to solve $188M deficit

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ST. PAUL, Minn. (AP) - The Latest on Minnesota's projected $188 million budget deficit (all times local):

1:35 p.m.

Gov. Mark Dayton says a projected budget shortfall will require some "modest corrections" to the Legislature's budget passed earlier this year.

An economic forecast released Tuesday shows a $188 million shortfall at the end of the current two-year budget cycle. But that sum could change drastically with a tax bill and other measures winding through Congress.

The Democratic governor says he won't make any budgetary plans until an updated economic outlook is released in March. But Dayton said Tuesday he'd rather rework pieces of the state's new $46 billion budget rather than plug a funding gap with Minnesota's rainy day fund.

Lawmakers return to the Capitol on Feb. 20.

1:15 p.m.

Minnesota's top budget official says lawmakers shouldn't rush to fill a projected $188 million budget shortfall with the state's rainy day fund.

An economic forecast released Tuesday shows the state faces a modest deficit at the end of the current two-year budget cycle. The shortfall would grow to roughly $586 million in the next three years.

But plenty could change before the Legislature returns Feb. 20. A tax bill winding through congress could provide an economic jolt and Congressional funding for the Children's Health Insurance Program could help fill Minnesota's gap.

Minnesota Management and Budget Commissioner Myron Frans says those answers may come in the coming months. But he cautioned lawmakers against tapping a $1.6 billion budgetary reserve to solve a budget shortfall.

9:40 a.m.

Minnesota lawmakers will have to fill a projected $188 million budget deficit next year.

State officials released an economic forecast Tuesday showing the modest deficit at the end of the current two-year budget cycle. That deficit would grow to roughly $586 million in the next three years.

It comes after a string of budget surpluses in recent years and more than $650 million in tax breaks passed by the Republican-led Legislature earlier this year.

The state's economic officials were expected to explain the deficit Tuesday afternoon. But their initial estimate faulted slowing economic growth nationwide and the 2017 Legislature's actions for the red ink.

But the estimate comes with major caveats, like massive unknowns with tax breaks moving through Congress and how it will impact the national economy.

7:40 a.m.

Minnesota officials are about to get an update of the state's financial standing, but Congress's ongoing push to slash taxes means lots of uncertainty in that update.

The U.S. Senate passed $1.5 trillion in tax breaks over the weekend but few specifics are set in stone. House and Senate negotiators still need to work out the differences between their bills.

That uncertainty looms large over Minnesota's scheduled economic forecast due Tuesday. Gov. Mark Dayton said Monday the numbers behind any budget surplus or deficit would be "speculative at best."

Dayton says he's waiting until after he and lawmakers get an update in March to lay out his spending priorities for 2018.

Lawmakers return to the Capitol on Feb. 20.

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