5.4. SR 04-14-2003 - Laserfiche WebLink

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Page 1 of 2 Klaers, Pat From: Peterson, Lynn [Ipeterson@LMNC.ORG] Sent: Thursday, April 10, 2003 2:18 PM To: General legislative Subject: [legislative] Legislative Update Is the economy getting better--or worse? Today, the Department of Finance released its April economic update and the news was mixed. The good news was that revenues for February and March exceeded projections by $60 million or approximately 3.3%. The bad news is that the report suggests that the state and national economies continue to struggle and that Minnesota's job losses continue to outpace the national averages. Total state payroll employment is now 2.2 percent below the levels observed more than two years ago in February 2001. Minnesota's national economic consultant, Global Insight has now reduced its economic forecast for 2003, 2004 and 2005, but their forecast remains optimistic. The April baseline forecast by Global Insight calls for real GDP growth of 2.6 percent in 2003, followed by 4.2 percent growth in 2004, and 3.1 percent growth in 2005. In February forecast was expecting growth rates of 3.0 percent in 2003, 4.6 percent in 2004 and 3.8 percent in 2005. These new, lower growth estimates will not immediately impact the state's projected deficit--unless the governor and Department of Finance state decides to issue a special state budget forecast. The next regularly-scheduled official state budget forecast will not be released until late November. Another tax proposal Today, the House DFL released the outlines of their proposed budget solution. Unfortunately, details of the plan are sketchy at this time. The plan apparently includes an income tax increase for upper income Minnesotans, similar to the Senate plan, but affecting persons with individual incomes in excess of $250,000 and joint filers with incomes greater than $500,000. The plan apparently cuts the income tax rates for lower income earners. For cities, the plan will apparently reduce aid cuts to about one-fifth of what the governor proposed. The plan would, however, delay the payment of December aids (or a major portion of that aid payment) until sometime in 2004--presumably in July. By shifting the aid payments into a subsequent state fiscal year, the House DFL plan would be able to minimize aid cuts. Although the plan would minimize aid cuts, the payment delay could create cash flow problems for some cities. We'll have more on the House DFL plan in tomorrow's FridayFax. You are currently subscribed to legislative as: To a blank email to islative-4444U~listserv.lmnc.org This email has been for by the MessageLabs SkyScan service. For more anti-virus service working around the clock, around isit http://www.messagelabs.com You are currently subscribed to legislative as: ~ers~c~.elk-nver.mn.us To unsubscribe send a blank email to leave-legislafive-4444U~listserv.lmnc.org This email has been scanned for all viruses by the MessageLabs SkyScan 4/10/2003