State economist Tom Stinson was the guest on Midday today, and he provided a wealth of background information about the state’s economic troubles and the actions government is taking to try to get out of them.
Among other things he expects a positive job growth in March because of hiring by the U.S. Census. But he says the national unemployment rate, and by extension the state unemployment rate, is likely to remain high for some time.
“The best guesses are that we’re going to see the national unemployment rate go back up to more than 10 percent again and to stay at the 10 percent level more or less through the end of this year,” he said. “That is a pretty discouraging and pretty dismal outlook, but the real concern is that it looks like it’s not until even in 2012 we would have more than 8 percent.”
Stinson said the Obama administration generally reacted well to the economic crisis and he said the federal economic stimulus is helping with employment. He said it’s a bad idea for the federal government to raise taxes now, but he said it’s a more difficult call at the state level.
“That’s a little harder because if you increase taxes at the state level that costs jobs,” he said. But if you don’t increase them it costs jobs because you’re going to have lay off people in state and local government as well, so that’s a little trickier.”
As for the next state revenue forecast due next month, Stinson told me he hadn’t yet looked at the national economic forecast which he received today from Global Insight. But he said he expected the outlook to vary by plus or minus a couple hundred million dollars, which means lawmakers will still have to confront a serious financial problem.
“Anybody that thinks we’re going to generate $1.2 billion in new revenue and solve the problem, they’re dreaming,” he said. “But anybody who’s having nightmares we’re going to give them $2.5 billion rather than $1.2 billion problem, they’re probably going to be relieved that we’re not going to be there.”