Live blog: February forecast announcement
10:29: Wrapping up. Hanson is giving the valedictory and offering to take more questions as the day goes on. The governor will be talking at 11 a.m. Look for more live blogging in 30 minutes.
10:25: Stinson is asked what hope there is for one of his signs of improvement, the credit markets, which have had billions poured into them already. "There are signs the credit marking is improving. Tax exempt bonds are getting closer to previous levels and high grade corporate bonds are trading close to normal."
10:21: Stinson: "We've had just an enormous depression in the housing construction industry." Housing starts have been down under a million for the first time since World War II. "You can't overcome that overnight."
10:17: Hanson is punting to the governor on what will happen next. "We have prior statutory authority on the receipt of the Medical Assistance money," he says. The rest will have to be hammered out with the governor and the Legislature.
Create a More Connected Minnesota
MPR News is your trusted resource for the news you need. With your support, MPR News brings accessible, courageous journalism and authentic conversation to everyone - free of paywalls and barriers. Your gift makes a difference.
10:14: Budget director Showalter says there are a number of strings attached to the stimulus money that will prohibit cuts in some areas of the state budgets. "There are quite a few programs that will be receiving federal stimulus money," he says.
10:08: Stinson back at the mic: "The stimulus dollars may be hiding the long term problem, but they're certainly helping the state economy in the short term... In the short term, it's welcome relief."
10:06: Hanson starts taking questions. He emphasizes that stimulus money is only for medical assistance, but that he's very worried about accelerating declines in revenue. "We're not out of the woods."
10:03 Stinson: "We're in the worst recession since World War II... but it will come to an end. It may take another stimulus package, but it will come to an end." He projects a return to growth in 2011 or 2012.
10:01 Stinson, again, on signs that the economy is turning around: 1) reversal of last three quarters of declines in consumer spending 2) drop off of growth in consumer savings rates 3) improvement in credit market 4) payroll employment.
10:00 Stinson: "The stimulus package is not going to jump start the economy... It just takes time to get that money into the system."
9:59: Stinson: "We think its going to be a relaitvely slow recovery. Those jobs that have been lost aren't going to fully recover until 2010." He says Minnesota has already lost 35,000 jobs and will lose a total of 120,000 by the time the recession ebbs. Total losses are forecast to be 15,000 in construction, 42,000 in manufacuturing, 15,000 in services.
9:57: Stinson says corporate, income and sales taxes are trending down nearly 5 percent over the last fiscal year. "This recession is going to be longer and deeper than we thought in November. It's probably going to be the longest and deepest recession since World War II."
9:55 -- State economist Tom Stinson says fiscal year 2009 revenues are down $213 million, 60 percent of it in corporate taxes. The stock market decline is also contributing to lower income taxes as Minnesotan's portfolios take a hit.
9:50 -- State budget director Jim Showalter is starting the state slide show, showing the infusion of Medicaid money that will help give an immediate boost to state finances.
9:45 -- State finance director Tom Hanson has kicked things off. Puts new budget shortfall at $4.6 billion, with the help of $1.8 billion in federal stimulus money. Without the cash infusion, the actual budget deficit would be over $6 billion for the biennium that starts this summer.