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State Representative Joe Mullery
100 Rev. Dr. Martin Luther King Jr. Blvd.
651-296-4262
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BUDGET FORECAST INFORMATION
I met with Commissioner of Management and Budget for an hour and there was almost no change from a few months ago. We improved about $300 million, which by law will go to repaying the money borrowed from the school districts, but we still owe them nearly two and a half million. Moreover, the forecast for the next biennium shows an overall $4 billion deficit (including over $1 billion in new deficit, the money borrowed from schools, and inflation).
What I thought was interesting is that we could do bonding to finance construction of public infrastructure up to $1.9 billion and still be within our guidelines, but if we did that entire amount we probably couldn't have much in a bonding bill the next two years. However, in talking to experts I've learned that probably around $1.2 billion would be responsible. Tom Stinson, the state's top financial prognosticator, said that a big bonding bill was the best thing we could do to get people back to work, so I'm pushing for a bigger bonding bill than the Governor offered (he said $750 million).
The state uses a national firm, Global Insight, to do the research on the future of the economy. Global reduced the probability for a recession from 40% to 20%. That's very good news. But they believe it won't be until the last quarter of 2014 before we're back to the number of jobs we had before the recession (Minnesota will probably be back to its number by end of 2013).
One bad thing about the $300 million improvement in the forecast is that it is mostly due to low income single adults not taking advantage of the new federal health program for them. They seem to be going without health insurance and health care. That could result in much more costs down the line.
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