In front of a packed audience of over 200 people, Dr. Stinson delivered the not-so-surprising bad news: the budget outlook was bad in November, when the economic forecast projected a $4.8 billion budget shortfall, and it has likely worsened since then.
In other words: expect an even larger projected budget deficit in the February economic forecast. The only upside is that it shouldn’t increase by more than $1 or $2 billion, and there’s the slim chance that our economy could defy expectations and improve earlier than anticipated.
Dr. Stinson expertly gave a clear and comprehensive view of the state of our economy:
- We are in a recession. Expect loss of 55,000 jobs in Minnesota in 2009, across all sectors.
- FY 2010-11 revenues are down $3.3 billion from end-of-session estimates back in May.
- Watch job growth for signs of an economic recovery. National monthly job growth of 150,000 jobs indicates “normal” growth.
- Some good news: Minnesota was recently able to sell $300 million worth of bonds. We couldn’t have done that in October.
- The federal economic recovery package could be helpful in the short-term, and provide an estimated several hundred million dollars to the state in FY 2009 and something in the ballpark of $600 million in FY 2010-11.
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