Years of payment delays and one-time federal windfalls have left Minnesotans facing a projected deficit of $6.2 billion over the next two years. Economists say there's a chance the sluggish economy will snap back and lessen the problem, but legislators are preparing to dive in and look hard at things to cut. A likely target is aid to local cities and counties along with the budget for health and human services, which gobbles up the biggest share of state dollars. So far, nobody has a plan to erase all the red ink. DFL Gov.-elect Mark Dayton's proposed budget during the campaign was short by more than $1 billion.


This year typically would see a small bonding bill, but Dayton has proposed a $1 billion package, hoping to take advantage of low interest rates and predicting that a massive construction schedule would stimulate job growth. Rep. Larry Howes, R-Walker, chairman of the House committee that deals with bonding, says GOP leaders state there will be no bonding bill. "My gut tells me there will be something, whether it's $120 million for flood mitigation or some emergency, maybe up to $350" million, he said. One reason to bet on a modest bill: political pressure on both parties to build some projects.


Despite Dayton's campaign pledge to increase education funding annually, he already has backed off somewhat from that position, now saying he will "do my utmost" to do so. A business-backed education foundation will recommend to the Legislature that the state's early education system be substantially revamped, with the goal of increasing the number of 5-year-olds who are ready for kindergarten. Because of continuing budget pressure, stagnant state funding and failed levies this year, school districts are likely to plead for more aid. The University of Minnesota is expected to ask for a big bump in state funding despite the grim state budget, although less than it received from the state in 2001.


When the new Republican-led Legislature scrambles to fix the state's deficit without raising income taxes, expanded gambling could prove an enticing avenue for new revenue. But spokesmen for the House and Senate Republicans say it's not something currently being considered by GOP leadership. Dayton, meanwhile, said during the campaign that he'd consider a state-run casino, an idea opposed by Indian tribes. Former Sen. Dick Day, who lobbies for creating racinos, said he's optimistic about passing a bill -- particularly if legislators need revenue for a new Vikings stadium.


The biggest change in health care coverage will be triggered solely by Dayton -- not legislators -- when he enrolls the state in a Medicaid program that's part of the federal health care law that will bring $1.2 billion in federal aid to Minnesota, with a state contribution of $200 million. About 50,000 people will come off the rolls of the MinnesotaCare program sometime in 2011, in particular childless adults younger than 65. MinnesotaCare will almost certainly come under scrutiny to see how it might be changed. By 2014, assuming federal health care reform stays on track, MinnesotaCare and the Health Care Access Fund are expected to disappear. Legislators could begin to scale back some of the programs next year and tweak General Assistance Medical Care, which also is scheduled to disappear.


While many programs likely face painful cuts in 2011, hundreds of millions of dollars will continue to be spent on so-called Legacy projects. The constitutional amendment that diverts sales tax money for the outdoors, clean water, parks, trails and the arts enters its third year. Though there are complaints that the bureaucracy controlling the money remains confusing, the money can be staggering. A new report shows that, in the past two years, 30 programs have shared $138 million for outdoors projects. Over the 25-year life of the Legacy amendment, the report predicts that as much as 17.8 million conservation acres may be restored and enhanced -- compared with 2 million acres without the special fund.


Minnesota's moratorium on building nuclear power plants is likely to face a stiff challenge this session from new Senate Majority Leader Amy Koch, who says lifting it is among her priorities. Koch, whose Buffalo district includes one of Minnesota's two active nuclear plants, has pushed unsuccessfully to lift the moratorium in the past. The Senate passed a bill to lift the ban in 2009, but the House defeated it. Dayton may also pose a threat, however. Whereas Gov. Tim Pawlenty was open to doing so, Dayton was the only general election candidate for governor who opposed lifting the ban. He has expressed concerns about the destination of nuclear waste.


It remains to be seen how much Republican spending cuts will slice into police, fire and other budgets. Good Thunder Republican Rep. Tony Cornish said one of his first tasks as chairman of the House Public Safety and Crime Prevention Policy and Finance Committee will be trying to avoid major cuts to public safety. Cornish said there is a "good chance" bills will be introduced later in the session limiting law enforcement's right to confiscate private guns in an emergency and giving people the right to shoot trespassers on their property. Not on the agenda? Medical marijuana.


Get ready for the blood sport of politics -- redistricting, the decennial redrawing of political boundaries based on new census numbers. Minnesota dodged one political fight when the initial numbers showed that the state would keep all eight congressional seats, but there is still plenty of battling ahead. Lawmakers and the governor are charged with drawing lines to make sure that all congressional districts have the same number of people in them. That means that suburban districts may shrink geographically, and the urban and Iron Range districts could grow. Then there's the block-by-block fight over the shape of legislative districts to contend with - microlevel census data for that task will be available in the first few months of 2011. While there will be blood spilled at the Capitol over the lines, most observers think that with a DFL governor and a Republican Legislature, a judicial panel will likely end up in charge.


Same-sex marriage was an underground topic during the recent election but may come to the fore this year as social conservatives press their advantage with newly elected Republican majorities. Their leaders say they have other priorities, but interest groups are expected to push for a vote on a constitutional amendment that would likely limit marriage to a man and a woman. Such an amendment would bypass Dayton, an ardent supporter of same-sex marriage rights. Republicans have proposed similar amendments in the past, but they were quickly knocked down by DFL leaders.


More than ever, the debate over whether the Minnesota Vikings should get public subsidies for a new stadium will hang over the Legislature. Dayton seems willing to do something, and the incoming Republican legislative leadership, despite preaching less government and wanting to fix the state's budget problems first, appears mildly interested. Now for the real problem: Despite years of discussion -- and with the Metrodome's roof now hanging in pieces -- there is still no plan on where to build and how to pay for it. There's also the fact that polls show most Minnesotans still oppose taxpayer help for the Vikings.


Dayton swept into office on a pledge that he could balance the budget largely by raising taxes on high earners. One problem: The state ran the numbers and found his plan doesn't raise nearly as much as he thought. Another: Republicans won control of the Legislature on their promise to block tax hikes and slash government spending. Taxes could wind up as the defining showdown of the session. Some legislators might try to float a couple other ideas to raise revenue, like expanding the state sales tax to include clothing and other services. One thing Dayton and Republicans seem to agree on is that they are in no mood to raise income taxes for middle-class families.


The election of Republican majorities in the House and Senate combined with the huge state budget deficit make significant new spending on transportation unlikely. But the biggest change will involve priorities. GOP legislators have been critical of rail transit, and Rep. Michael Beard, R-Shakopee, chairman of the House Transportation Policy and Finance Committee, is no fan of plans for building high-speed trains or expanding light rail in the southwest metro. "My intent will be to yard these trains, put them in a siding," Beard said. One major project -- the extension of the Northstar commuter line to St. Cloud -- has been put on hold amid concerns about ridership this year. The state Department of Transportation, facing spending constraints, is emphasizing preservation of existing roads and bridges rather than building new ones.