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What’s driving mixed economic forecast

A small budget surplus of $399 million in the current budget and a big shortfall of $6.2 billion in the next budget cycle are caused by federal money running out and onetime fixes from the legislature and governor.  “In the short-term the sta

A small budget surplus of $399 million in the current budget and a big shortfall of $6.2 billion in the next budget cycle are caused by federal money running out and onetime fixes from the legislature and governor.  “In the short-term the state is taking care of its business… in the long-term there’s significant unfinished business ” according to Budget Commissioner Steve Sviggum.  Both Sviggum and State Economist Tom Stinson said the state has “played all its cards” with onetime cuts and shifts and the next legislature will have to look at structural changes to the budget.

A couple of bright spots included agricultural and wages.  Sviggum, who’s always happy to find a sunny side, said “What’s good about Minnesota is wage growth is better here than nationally.”  Construction is a dark area and will continue to lag.  There is no need for unallotment or short-term borrowing.  Dr. Stinson said as far as a bonding bill for state construction projects “there’s not a lot the state can do to stimulate.”  Stinson also said gubernatorial candidate Mark Dayton’s plan to tax the rich doesn’t do much in the short-term and in the long-term could be a “drag on growth” unless the money is spent on maintaining our strong workforce.