Pawlenty warns deficit could hit $7 billion

Gov. Tim Pawlenty is warning that since the economy is not improving, Minnesota's state budget deficit is likely to grow by $1 billion or more.

The governor made his remarks in a speech today at a meeting of the Minnesota Association of Townships.

The budget gap is currently projected at $4.8 billion over the next two years, but that figure was released in November. Pawlenty says when the next forecast is released in early March, the size of the projected deficit is likely to reflect continuing weakness in the economy.

"So they're going to add another -- in my opinion, in my view -- another billion dollars or so in deficit to the state," said Pawlenty. "So instead of having a $5 billion deficit, we are going to have a $6 or $7 billion deficit, and it's not clear when this economic collapse is going to bottom out. It could continue to deteriorate."

Pawlenty also says his proposal to reduce spending growth on health and welfare programs probably won't happen, because the federal stimulus bill will include money for those programs in exchange for keeping them as they are.

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