CCP 07-31-1995 - Laserfiche WebLink

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I . - "''ritE'~', STATE OF MINNESOTA I .Cli....... ~ :W~ OFFICE OF THE GOVERNOR .~,<,,"'_9 \: 0: ~--:Jl 130 STATE CAPITOL ImJ;h'4 j SAINT PAUL 55155 ">-",t~~j;.'.do-' ARNE H, CARLSON J i.l L. .-;,' i9Ll;'" I GOVERNOR i ,~ "'-" I July 20, 1995 I Dear Friend: I Now that the 1995 Legislative Session has adjourned, I write to tha..T1k you for your participation in the budget and political process. I firmly believe that the FY 1996-97 budget just signed into law meets the needs and priorities of the people of Minnesota I and will serve the state well. The information, energy, and expertise you contributed during the process helped shape the final outcome. We are grateful for your efforts. I I also write to urge you to make wise financial decisions now, just as the state of Minnesota has done. Unless we prepare immediately, we risk the very real possibility of dramatic shortfalls starting as early as January, 1997. Let me be absolutely clear: most I- spending systems have just received the largest increases they are likely to see in the foreseeable future. In the next biennium, funding will get even tighter. I encourage you to begin preparing today and to set your expectations now for lower growth and tougher I choices in the years ahead. I also write to solicit your creative ideas for ways to turn our financial crunch into an exciting opportunity for reform, innovation, and improved results. I Simply put, several powerful forces are creating a structural budget deficit. Specifically, I this structural deficit will create a gap between revenues and expenditures of about $1 billion by FY 1997. The structural deficit will be driven by 1) lower economic growth 2) lower state revenue growth 3) changes in demographics (more children and seniors) that wili suain state servic'- an'~ ,I) "he -i.lr......n+ ~tn.........~'....r.> ,...; ,..,.......'"'e-rn,.,.,~nt c~rvi'('pc,;; Mv I ~ C~, u'"t l,. f"" 11,,;, 11..;) u....i.U..l.I,; U.a. 6V1' ....................... ....... --......._. _.~,/ Administration outlined this problem in detail last January, with the release of the report "Within Our Means." I Two additional factors could exacerbate this structural shortfall. First, Minnesota is likely to face sharp cutbacks in federal aid now that Congress is moving to balance the I federal budget. Second, recent economic reports have suggested that the state and nation could easily find themselves in a recession in 1996. As you can see, a combination of the state's structural budget imbalance, federal cutbacks, and a recession I could sharply reduce revenue growth as early as next year. Prudence dictates that we prepare ourselves now for this contingency. I - I (612) 296-3391 - Voice AN EQUAL OPPORTUNITY EMPLOYER (612) 296-0075 - TDD (BOO) 657-3717 - Voice PAINTED ON RECYCLED PAPER CONTAINING 15% POST CONSUMER MATER!AL (800) 657-3598 - TDD s">II~.~'75