State of Minnesota Economic Forecast – November 2009
Yesterday Minnesota Management & Budget (MMB) released the November 2009 economic forecast for the State of Minnesota which projects a $1.203 billion deficit for the current 2010-2011 biennium due to an extended weakness in the economy. For the next biennium, 2012-13, a $5.426 billion deficit is being projected without adjustment for inflation reflecting the use of many one-time solutions, including the federal stimulus funds that do not continue beyond fiscal year 2011.
MMB Commissioner Tom Hanson said that the story of the forecast is unemployment is up and wages are dramatically down. Hanson said 70 percent of the deficit is a result of a decline in income tax receipts. While state economist Tom Stinson did assure us that, “we are clearly on the long, slow path upward,” Hanson warns us that although the recovery has begun, it will be “long, slow and bumpy.”
This forecast is within the bounds of what MSU Moorhead has been anticipating and for which we have been planning. As we adjust to a permanently reduced base of future state appropriation or what has been termed the “new normal,” our efforts to increase tuition revenue through increased enrollment and to reduce costs through reorganization become even more critical. As a University, we’ve already made considerable progress.
Additional initiatives underway in these areas will be discussed at town hall meetings on Tuesday, December 15 at 6:30 a.m. (OW 201), 10:00 a.m. (CMU Ballroom), and 3:00 p.m. (CMU Ballroom). Everyone on campus is invited to attend a meeting convenient with their schedule.
President Edna and Jean Hollaar, University Planning & Budget Officer