MINNEAPOLIS, October 23, 2008 - The state of Minnesota is expected to face a $1 billion plus budget deficit in 2010 and 2011 that could jeopardize health care spending.

Minnesota State Budget Director Jim Schowalter sent an email to state department heads in October informing them that Gov. Tim Pawlenty was asking for budget proposals that included 5 percent spending cuts.

The email said the state faced a known deficit of $1 billion for the current biennium and was at risk of an even larger shortfall because of poor economic conditions. Some policy budget experts have said the shortfall could be as high as $3 billion.

Dave Renner, the MMA’s director of state and federal legislation, said it is too early to tell what impact a budget shortfall would have on health care spending, but it’s his understanding that Gov. Tim Pawlenty wants to balance the budget without raising taxes. The next formal budget forecast is scheduled for the end of November.

When faced with previous budget shortfalls in recent years, Pawlenty has looked to disproportionally cut health care spending and raid the Health Care Access Fund to balance the state’s general fund.

“Given the grim financial outlook, we are really going to need physicians to be active during the next budget session to protect the integrity of the Health Care Access Fund, public health spending, and other safety net programs,” Renner said.

The Minnesota Legislature is scheduled to convene January 6. Its major work will be to approve a state budget for 2010-2011.