Faced with a mind-boggling $5 billion budget shortfall, and fears of future cuts mingled with memories of last month’s “unallotment” of funds by Gov. Tim Pawlenty, many Minnesotans are pondering the state’s finances. To help, we offer a rundown of the basics of Minnesota’s budget.

• In Article XI, the Constitution of the State of Minnesota mandates that the government have a balanced budget. It’s been that way since statehood.

• When the the state spends more than it takes in, as happened in 2008, the state must balance the budget, a job that rests with the governor. The governor must spend down the state’s reserves before he has the authority to cut general fund programs and expenditures.

• In 2008, Gov. Tim Pawlenty took $155 million out of the reserves and $271 million out of state expenses through a process is known as an unallotment. $110 million in cuts to state expenses came out of local government aid. That $426 million deficit is separate from the $4.8 billion that is anticipated for the biennium 2010-2011.

• By law, the governor must consult with the Legislative Advisory Commission, which is made up of the senate majority leader, speaker of the House, Senate Finance chair, House Ways and Means chair and several other committee leaders in the case of an unallotment. There is no deadline for an unallotment.

• The governor does not have to take advice or direction from the Legislative Advisory Commission or the Legislature when he cuts.

• The unalotment of funds to local government aid is thought to have the most impact. Although the state budget ends on June 30, 2009, local government budgets ended on Dec. 31, and the governor unallotted funds in late December. Most municipalities had already budgeted and spent the local government aid money that was cut in the unallotment, leaving holes in many budgets.

• Minnesota operates on a two-year budget cycle. The current cycle, FY 2008-2009 began on July 1, 2007, and will end on June 30, 2009.

• Each odd numbered year is a budget year, and in 2009 the legislature and the governor will decide FY 2010-2011, which begins on July 1 of this year.

• As part of the budgeting process, economic and budget forecasts are released twice a year. In November, Minnesotans found out that the state faced a $4.8 billion dollar deficit over the next two years (FY2010-2011). In February, another economic and budget forecast will be made. These always occur in February and November.

• The total general fund expenses for the state are $34 billion for two years (FY2010-2011) or about $17 billion per year.