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Editorial: Our state faces a few budget decisions as deficit needs fixing

  Minnesota and its Legislature got some tough news Wednesday with the latest state budget forecast showing a $1.1 billion deficit.

 The state will finish the current fiscal year with a $1.3 billion surplus, which will be used to pay back previous borrowing from public schools. Yet one-time budget transfer, higher costs and the slower economic recovery combine for the projected deficit.

 Minnesota has been on a seesaw of surpluses and deficits for more than a decade. There remains a structural deficit that resulted from the one-time funding mechanisms used to balance the 2011 budget and

 kicking budget decision down the road.

 Hopefully the 2013 Legislature will take a renewed approach to creating the next budget. The state must take a serious look at its spending and continue to make tough budget decisions. The state should evaluate its additional revenue options, including appropriate tax reforms. Any tax increase should only be considered as a last resort for critical needs.

 The positive news is that the national economy appears to be poised for growth. Economists believe the auto and housing markets are especially ready with pent-up demand.

 State forecasters pointed to Minnesota’s unemployment of 5.8 percent, lower than the national average and to the construction industry ready to grow with positive signs.

 The biggest budget challenge remains the imbalance between state spending and revenue collected. The next Legislature needs to make the appropriate decisions and spend prudently.