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Legislative News and Views - Rep. Bud Nornes (R)

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Economic forecast and more

Friday, December 08, 2017

Dear Neighbor,

Just some quick notes from the Capitol, starting with this week’s state budget forecast issued by Minnesota Management and Budget, which shows a projected $188 million state budget shortfall.

This gap is mainly due to lower-than-expected revenues based on assumptions about federal legislation and U.S. GDP and wage growth. Some federal uncertainties could be resolved in the near future, bringing the projected bottom line into balance or even better.

For instance, the forecast included $178 million in state spending on the federal Children’s Health Insurance Program, nearly all of which would be backfilled once CHIP is renewed at the federal level. The state forecast also assumes that no tax bill will be passed at the federal level despite passage in both the House and Senate last week. Furthermore, the forecast assumes 2.2 percent GDP growth in 2017, even though our state has shown 3.1 and 3.3 percent growth in the second and third quarters, respectively.

The main thing to remember is that Minnesota’s economy is strong, with unemployment rates lower than they have been in 17 years and earnings on the rise. In this economic forecast, some unresolved issues at the federal level seemed to diminish those positive aspects of Minnesota’s economy, something that could be rectified by the time our next forecast is issued in February. Those February numbers are the ones that matter most since they will form the framework for the Legislature’s work in 2018.

The full budget forecast report from MMB can be found by clicking here.

On another note, I want to congratulate area groups that successfully applied to receive broadband grants.

The Minnesota Department of Employment and Economic Development recently awarded 39 broadband grants statewide, totaling more than $26 million to bring broadband access to unserved and underserved parts of the state.

Some grants leveraged funding from the Connect America Funding (CAF) from the federal government, helping stretch funding from the state.

According to a press release from DEED, Otter Tail Telcom will receive $173,683 to bring access to unserved and underserved households and businesses north of Fergus Falls. The grant is being matched by private funding. Also, Arvig will receive $633,642 to bring access to more than 600 unserved households and businesses in the Pelican Rapids area. This grant, too, is being matched by private funding.

This is another step toward eliminating black holes of internet coverage in our area. Families and businesses depend on stable connections to function in today’s society and the Legislature has been working to develop more reliable coverage. We approved $20 million in grants for the Border-to-Border Broadband program during the 2017 legislative session.

Congratulations again to the local grant recipients and I look forward to seeing this work bring positive results to our area.



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