NEWS DAY | Stinson vs. Pawlenty on MN economic forecast?

Who cares about facts? State Economist Tom Stinson does, reports the Star Tribune, and that has not endeared him to Governor Tim Pawlenty. Wednesday is D-Day for the semi-annual economic forecast, and it won’t be good news for Pawlenty – or for Minnesota. The forecast projects state expenses and revenues two years out, and it’s likely to show continuing big budget deficits.

Pawlenty has already started is pooh-poohing the probable prognosis, questioning whether any forecast is reliable. Even in the short-run, however, tax revenues are running $200 million below March predictions.

The current situation, summarized by the Strib:

Minnesota faces a never-before-seen “structural budget deficit” that reaches far into the future, Stinson warns — a phenomenon wrought by an aging workforce and slowing revenue growth that will hamper the state’s ability to provide the services taxpayers have come to expect. There are no short-term answers, he said, and no single approach, such as tax increases or spending cuts, will by itself solve the problem. …
In his presentations, Stinson has prominently featured an uncomfortable nugget of information for government-spending-is-the-problem adherents: State and local governments take a smaller bite of Minnesotans’ personal income now than at any time in the last 15 years: 15.5 percent in 2008, down from 17.9 percent in 1993.

Stinson, who has been the state economist for two decades of DFL, GOP and Independent governors, is pretty independent himself. Back in June, he gave a comprehensive interview to Politics in Minnesota, explaining in detail why and how the recession affects Minnesota tax collection. Stinson is also a professor in the Department of Applied Economics at the University of Minnesota.

This isn’t the first time that the governor and the state economist have been at odds. Back in January, 2008, Stinson said Minnesota was in a recession. Pawlenty disagreed. According to Minnesota 2020:

While short on facts as to why he disagrees with the State Economist, Pawlenty implies that Stinson is trying to “overly scare people.”  According to Pawlenty, “Tom Stinson tends to be a bit on the pessimistic side of things, to put it charitably.”

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