On Tuesday, the House State Government Finance Division and the Higher Education and Work Force Development Policy Division met to discuss Minnesota’s economic stability, higher education, and the role of state government. Tom Stinson, Minnesota’s state economist, provided an update of the state’s budget forecast, which had been projected to be $373 million in November 2007.
Based on a report from the economic forecasting firm Global Insight, Inc., Stinson stated the deficit will likely grow, especially now that the state is officially in a recession. He also speculated that Minnesota will be hit hard, “because the state doesn’t have strong defense and energy exploration industries to buffer other economic difficulties.” The poor housing market and underperforming job growth have also contributed to the economic slowdown. While the recession is expected to last for the first half of the year, Stinson said the state could lose one year of growth in employment and income. The legislative session will be tense as lawmakers try to fund transportation initiatives and preserve social service spending in the midst of a budget deficit and declining economy.
To read more about the state of the economy, go to http://www.startribune.com/local/15355831.html.