Minn. among 38 states facing budget shortfalls

Minnesota isn't alone as it struggles to fill a nearly $3 billion budget gap. The National Conference of State Legislatures reports that 38 states and Puerto Rico are facing budget shortfalls to the tune of $89 billion.

Arturo Perez, a fiscal analyst with the National Conference of State Legislatures, said the reason for most of the budget trouble can be attributed to less revenue and more residents seeking help from state government.

"States have had this situation where they've been facing a decline in revenue collections at the same time that caseloads for programs like Medicaid have risen as a result of rising unemployment and other problems in the economy," Perez told MPR's All Things Considered.

The recession has caused corporate, income and sales tax receipts to decline in most states, including Minnesota.

States are using different strategies to solve the budget crises, Perez said. About 20 states, including Minensota, are still working out a plan.

"Everything has been on the table," Perez said. "We've had states raising taxes, they've been cutting spending, they've had to tap budget reserves."

The federal stimulus bill passed in 2009 helped many states minimize budget cuts last year, but Perez said the recession has continued, forcing states to look for things to cut.

"Easy decisions were made long ago," he said. "The low-hanging fruit has already been picked off, and we're down to the point where states are having to make some rather tough decisions about how to balance their budgets."