So much for any drama in today’s release of the heretofore closely guarded budget forecast secret.
The November forecast shows we’re only $373 million in the red, based on the $34.6 billion biennial budget the state approved last year.
So sayeth Commissioner of Finance Tom Hanson, State Economist Tom Stinson and State Budget Director James Schowalter. Both individually and collectively, the three explained the numbers and the economic assumptions behind them in soft-spoken voices and mild-mannered styles.
For now, they are Clark Kents who don’t need to shed their plain suits for Superman attire to rescue state finances.
The budget forecast news conference was held in Room 15 of the State Capitol, its most ornate hearing room, which sits directly below the rotunda. As the traditional room for the annual tax conference committee meetings, Room 15 has witnessed many an incendiary discussion over the years, with firebrands like former legendary DFL Senate Tax Chair Doug Johnson and populist former DFL House Tax Chair Paul Ogren framing the debates.
No fires today. As soon as Hanson announced the number, everybody relaxed — although truth be told, any reporter or lobbyist who has been around the block knew the number before it was officially made public.
Capitol insiders breathing easier
An inconsequential forecast made most Capitol insiders’ lives easier. For the media, it meant no frantic searching or tracking down a unique and important angle to what a big budget deficit means to the state. For those lobbying for more money — education, transportation, cities and health care — the $373 million shortfall doesn’t significantly alter their we-need-more pleas. For those lobbying for projects in the bonding bill, the new forecast means the state can still afford a billion-dollar bonding bill.
But the relatively low deficit number does create trouble for one faction of public opinion: those individuals and groups that have deep philosophical difference with Republican Gov. Tim Pawlenty.
These include Growth & Justice, an economic think tank whose president, Dane Smith, recently wrote that “for a decade now Minnesota has pursued a risky experiment.” Another group, the Minnesota Budget Project (an initiative of the Minnesota Council of Nonprofits) thinks, “[Pawlenty Administration] policy choices contribute to state’s budget woes…time to end the failed experiment.”
Hmm. With major economic bad winds blowing in the housing sector, credit markets, energy prices and state employment numbers, the state is down only $337 million so far.
February forecast likely to show bigger deficit
The next economic forecast comes at the end of February, and the Clark Kents foretold of a bigger budget deficit then. That’s likely, but it would take more than several additional months of an economic downturn to require Supermen or produce evidence of a “failed experiment.”
To the left of the entrance to Room 15 hangs the portrait of Pawlenty’s immediate predecessor, Jesse Ventura in a navy suit, one hand perched on a statue of “The Thinker,” the other holding a cigar. The former Independence Party governor has a look of intelligence in his eyes that many would argue was absent during his administration. But Ventura looks serenely happy, as was the state financially during his years in office: a couple of deficits, and one big surplus year (remember “the boatloads of money” that led to income tax cuts?).
On the other side of the entrance is a portrait of Ventura’s predecessor, Arne Carlson. The former GOP governor is sporting a Gophers jacket while leaning on a pillar outside Northrop Hall at the University of Minnesota. Arne’s countenance is kind and gentle … and many would argue that’s not how they remember the volatile governor renowned for his temper. But despite a few shortfalls, times were pretty good in his administration, as well.
When Pawlenty leaves office, the portraits will get shuffled and Pawlenty’s will go where Ventura’s is now. One can’t help but wonder what facial expression Pawlenty will choose to have painted for posterity — and whether that face will match the economic times that transpired during his tenure.
Sarah Janecek, publisher of Politics in Minnesota, writes about public affairs and politics. She can be reached at sjanacek [at] minnpost [dot] com.