Minnesota will face a $1.1 billion shortfall during the next biennium, according to figures released today from the Minnesota Management and Budget Office.

State forecasters released their November outlook, used by Gov. Mark Dayton to propose a budget to the state Legislature, which will reconvene in January.

Although the state will experience a $1.3 billion balance in the current biennium, those funds must go toward a $2.4 billion funding shift from Minnesota’s schools.

The current budget forecast also suggests a high level of future uncertainty. If the White House and Congress are unable to strike a deal to avoid the so-called fiscal cliff, there would be major repercussions for the state. The MMB Office projects that going off the cliff would cause state unemployment to rise from 5.7 percent to 7.1 percent by 2014. Personal income in Minnesota would fall by more than 4 percent by 2015, said forecasters.

The fiscal cliff also carries big implications for state revenue. MMB officials estimate a $700 million decline income tax, a $350 million drop in sales tax, a $250 million decline in corporate tax and behavioral changes could mean another $400 million loss in income taxes. Altogether, state forecasters report that total losses could total more than $1.7 billion, or 5 percent, of FY 2014-15 baseline revenue.

The MMB Office will revise and finalize its forecast numbers in February.

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