Minnesota finance officials release the state's latest revenue Tuesday. The forecast will show a budget shortfall that many legislators expect to be around $1 billion. The state's first deficit in nearly a decade will mean tough choices - and lots of fingerpointing - in the 2002 session.

	Gov. Ventura isn't expressing any regret, at least publicly, about the economic downturn. He says the state is in good shape to weather the economic downturn. Listen to Ventura's interview with MPR's Laura McCallum. (MPR Photo/Laura McCallum)

In every forecast since 1992, Minnesota racked up surplus after surplus. Political leaders cut tax rates, handed out rebate checks and spent more money on education and other priorities. Now that there's a budget shortfall, the choices are less pleasant, and the fingerpointing has begun.

DFL Senate Majority Leader Roger Moe of Erskine blames House Republicans and Gov. Ventura for putting the bulk of the surplus into tax relief. "When this governor walked into office, he had billions of dollars in surplus and reserves, and now we're looking at a deficit. I think that is certainly going to be something that the average taxpayer in this state is going to shake their head over," Moe said.

Gov. Ventura rejects any suggestion that he's to blame for the budget problem. "When the nation announces we've been in a recession since March, it's a pretty big stretch to try to say the governor of Minnesota's responsible for it," Ventura said. "But remember, this is politics, and all's fair in love, war and politics, so certainly they'll try to - maybe people will try to convince the public of that, but that's balderdash. That's total b.s."

Ventura says the economic activity of the private sector created the state's huge surpluses, and the private sector is now creating the deficit. Senate DFL leaders say the situation wouldn't look as dire if Ventura and House Republicans had listened to them. They wanted to set aside all or part of last year's one-time surplus - the nearly $800 million that went back to taxpayers in the form of rebate checks.

	DFL Senate Majority Leader Roger Moe of Erskine blames House Republicans and Gov. Ventura for putting the bulk of the surplus into tax relief. "When this governor walked into office, he had billions of dollars in surplus and reserves, and now we're looking at a deficit. I think that is certainly going to be something that the average taxpayer in this state is going to shake their head over," Moe said. (MPR Photo/Laura McCallum)

Senate Assistant Majority Leader John Hottinger of Mankato says if his caucus had its way, the state would have an additional $400 million cushion. "The governor and the House were less willing to do that, and I think they may feel a little regret about that come Dec. 5," Hottinger said.

Gov. Ventura and House Republicans aren't expressing any regret, at least publicly. They say the state is in good shape to weather the economic downturn.

Lawmakers left an extra $235 million on the bottom line at the end of last session. The state also has $650 million in budget reserves, and a $350 million cash flow account.

Republican House Speaker Steve Sviggum says that gives the state close to $1.3 billion to deal with the shortfall. "We're probably better prepared than most states - maybe than all states - to face the recession that we're in. We've got those three pots of money, the budget reserve, the cash flow account, the money we left on the bottom line, which is a significant cushion, significant comfort to citizens of the state that we won't either have to raise taxes or retrench commitments to the spending side," according to Sviggum.

Sviggum is hoping that by the time the February forecast comes out, the state's outlook will be rosier.

Finance Commissioner Pam Wheelock says Minnesota's national forecasting firm - DRI - predicts a recession through early next year. "The good news is, they think it'll pick up pretty quickly, when it does pick up after the first quarter of calendar year '02. But the bad news is: you never make up those revenues. You never make up the revenue from a hotel that's half full or a plane that's only got 30 percent of the seats sold, and so that's a permanent loss of revenue," Wheelock says.

Wheelock has asked state agencies to come up with ways they can cut up to ten-percent of their budgets. She has also instructed them to halt any new state grants.

Gov. Ventura says he wants to first look at spending cuts to address the shortfall, but says all options should be on the table.

The chairman of the House Ways and Means Committee, Rep. Dave Bishop, R-Rochester, says the state can't solve the problem simply by eating up the budget reserves. "The wisest thing on a long term basis would be to have a balance of cuts in spending and some increase in taxes. But it's an election year, and I know the nature of my caucus in the House is very hostile to any increase in taxes," he said. Legislative leaders in both bodies are already saying education is off limits to spending cuts. Longtime legislators say the shortfall will make for some tough votes next session - especially for lawmakers who've only been around during times of plenty.