ST. PAUL (AP) -- As budget talks reach a heightened stage of concern, two of Minnesota's top financial officials hoped to shed light Thursday on the state's economic status.
Finance Commissioner Pam Wheelock and State Economist Tom Stinson called an 11 a.m. news conference "to discuss May economic forecast data." No other details were available beforehand, an administration spokeswoman said.
More than two weeks after the 2001 legislative session adjourned, lawmakers have yet to agree on a budget to fund state programs for the two-year period that starts July 1. The new data might give them some guidance.
Senate Majority Leader Roger Moe, DFL-Erskine, said that if the numbers were lower than previous forecasts, it might make sense not to use all of the available money for spending or tax cuts, letting some go into reserve as a cushion in case of an economic downturn.
House Speaker Steve Sviggum, R-Kenyon, said that if projections were lower, it might make sense to be a little more cautious on long-term spending.
Administration officials typically hold news conferences in February and November to release long-range financial forecasts. The quarterly economic updates they release in January, April, July and October track year-to-date revenue collections and seldom draw much attention. Even less focus is put on forecast data gathered in the other months.
In November, the forecast projected a $3 billion surplus for fiscal years 2001-03. By February, a weaker economic outlook dropped that figure by about $600 million.
Revenue collections by the state came in $60 million below projections in the April update, which covered February and March tax receipts. In that report, personal income tax receipts had exceeded expectations, but the sales tax, corporate income tax and motor vehicle sales tax were all off the mark.
Department of Finance officials noted that the shortfall in corporate income taxes reflected a weaker than anticipated outlook for corporate profits, while the other tax figures were "within normal bounds."
Officials in the April report emphasized that, "The outlook for the U.S. economy has weakened considerably during the past few months." They predicted lower state revenues if the pattern economists charted held true.
Another indication of a cooling economy is the soaring number of Minnesotans seeking unemployment insurance for the first time. In May 2001, initial jobless claims were 24,861 -- more than double the figure for the previous May.
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