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Editorial: Get serious with budgets

Good news and bad news had better add up to a new budgeting reality for governments. All of them -- local, state and federal.

Minnesota will finish the fiscal year on June 30 with a $1.3 billion surplus, state finance leaders said Wednesday. Of course, it's not really a surplus because the money is on involuntary loan from public schools.

Wednesday's report included news that school districts will receive that $1.3 billion. The first payment comes around Dec. 15. The rest will come early in 2013.

This is especially important for those districts like Cannon Falls that have had to borrow money to make ends meet. Meanwhile Red Wing and some other districts have had to delay building repairs, technology upgrades and more.

Repaying of education is the good news.

But the state faces a potential $1.1 billion deficit for the budget cycle that begins July 1, according to Wednesday's financial forecast. Details appear in today's print edition.

That bad news could get worse by February's forecast.

One reason is the federal government has bigger problems than Minnesota has, and those will mean every state will play a role in addressing the national crisis. America's "fiscal cliff" will arrive Jan. 1. That's the day a plan cobbled together 18 months ago takes effect. We will see major cuts to programs plus $500 million in tax increases to address deficit borrowing unless Congress and the president quickly change the plan.

No financial forecast is ever accurate, but this month's state forecast is dangerously foggy because of federal woes.

Still, the projection should help state lawmakers begin establishing a two-year budget for state operations. The 2013 Legislature must take a different approach to creating that budget. Lawmakers must examine spending, make tough decisions and start reforming the tax code.

Government needs to balance what it collects with what it spends. Until that happens in Washington and in St. Paul, local governments should try to live within their means -- within the revenue stream they can control.

Let's get Minnesotans off the surplus-deficit rollercoaster.