Now is not the time to be (or appear to be) greedy at the State Legislature...
Minnesota's economic outlook appears bleak for foreseeable future
The state's sales tax receipts for the quarter ending Sept. 30 were 13.5 percent below the sums received for the same quarter last year, according to an economic update [PDF] issued Monday by the office of Minnesota Management & Budget.
"We may have stopped sliding downhill," said State Economist Tom Stinson. "But these figures tell us that this has been a very difficult time for the Minnesota economy. ... These are pretty big hits."
Monday's economic update also showed that state revenues are running behind projections set in February. The full impact on Minnesota's fiscal picture won't be known until a comprehensive forecast comes in December.
What's known for now is that individual income tax receipts for this past quarter were $93 million short of budgeted expectations. Sales tax receipts fell $20 million short.
"We thought we had a very pessimistic assessment when we finished the forecast in February, and we are actually running worse than that assessment," said Sen. Majority Leader Larry Pogemiller, DFL-Minneapolis.
If the trend continues, the state's already bruised budget is likely to take further cuts next year, Pogemiller said.
In response to shortfalls this year, Gov. Tim Pawlenty cut nearly $3 billion in state spending through a controversial "unallottment" process, wiping out funding for some programs entirely. The governor's office did not respond to a request for comment on Monday's economic update, but other experts agreed the state may need to brace for more belt tightening.
Another way to look at the state's latest economic update is to see its reflection of our collective abilities to earn taxable incomes and buy goods that generate sales taxes.
The view from that perspective is likely to remain bleak for some time to come, said Elizabeth Peterson, director of research and planning for Greater Twin Cities United Way.
Because unemployment almost surely will rise even while recovery starts, "everything is going to be lagging," she said.
"Sales taxes will be lagging because people still are afraid they are going to lose jobs," she said. "Wages are going to be stagnant. It's not pretty."
It's particularly ugly for at least one in 10 Minnesotans who are unemployed or underemployed at lousy part-time jobs. They are fighting grim, gut-wrenching hardship that many of their families never have seen before.
About half of Minnesotans are buying less food, according to a Northwest Area Foundation survey reported in September. And nearly half had lent money to family and friends.
More than one-fourth of those surveyed said they had problems paying for such basic necessities as mortgages, rent and heating. Twenty-three percent have had a friend or family member stay with them because money was short. And 32 percent had trouble affording health care.
Please keep the above in mind when you go over to the legislature and tell them that now is the time to invest in the University of Minnesota. This will only contribute to our already bad image as an institution that does not place a very high priority on the needs of others.
I am really tired of hearing the line: Now is the best time to invest in the U. Give us the money because it will go ever so much farther in these hard times?
I don't think so.