Saint Paul – Governor Tim Pawlenty today called the state’s projected $1.2 billion deficit “significant, but solvable. As we tackle this challenge, we will follow these key principles: government must live within available revenues and Minnesota must become a more business-friendly and job-friendly state.”

“State government budgets are not immune from the impacts of the nation’s historic economic crisis,” Governor Pawlenty said. “State government needs to live within its means. We must also take steps to make Minnesota more competitive for private sector jobs, not just government jobs. That includes holding the line on taxes.”

Governor Pawlenty said he will work with the legislature to resolve the budget shortfall. He requested that legislative leaders start committee hearings immediately to craft budget reductions that could be enacted promptly at the beginning of the legislative session that gets underway on February 4, 2010.

Because of the timing of payments, the Governor said it may be necessary to unallot a portion of December 2009 local government aid. Governor Pawlenty has directed his cabinet members to begin working with legislators to discuss that potential unallotment and other possible solutions.

Governor Pawlenty also announced he is ordering state government agencies to place a hold on spending. The Governor’s reduction order targets 3 percent of unspent operating funds in the current budget period.

“The shortfall is also further proof that we need to modernize the way the state makes budget decisions,” Governor Pawlenty said. “Once again, we find ourselves with a shortfall that reflects spending decisions that are locked in while revenues are subject to change. That uncertainty needs to be reduced. Limiting state government growth through a constitutional amendment would help rein in spending and bring greater certainty to the budgeting process.”


                                               Click here to listen to the Governor's press conference