It's a good news, bad news situation. Minnesota's tax collections are up, but rising oil prices could hold down future growth. The information comes from a new budget update. Minnesota Public Radio's Michael Khoo has this item:
Revenues for February and March were up 3.5 percent over projections, driven in large part by higher-than-expected payments from the sales tax and the corporate income tax.
The extra revenue is already committed under the terms of the 2003 deficit reduction package. Unless that's changed, the new funds won't be available to soften the latest projected budget shortfall. That's estimated at $466 million over the next two years.
The update also notes that oil prices remain above the "comfort zone" and could act as a drag on future economic growth. Oil prices are stuck above $50 per barrel, while forecasters had thought they'd fall to $35 per barrel by the end of the year.
It just goes to show how hard it is to project the budget two years out. And it's another reminder that Minnesota is unlikely to grow out of its budget problems.
As gas prices rise the Star Tribune has an item about two lawmakers who want to repeal a measure that sets a minimum price for gas sold in Minnesota:
Sen. Charles Wiger, DFL-North St. Paul, and Rep. Joyce Peppin, R-Rogers, would repeal the law, saying consumers are ill-served by artificially inflated prices at the pump.
Enacted in 2001, the law requires retailers to price gasoline at cost plus applicable state and federal taxes plus 6 percent or 8 cents per gallon, whichever is less. The measure is designed to protect "mom-and-pop" service stations from being big-footed by major retailers, who, independent retailers say, can charge less for their gas in an attempt to drive the smaller operators out of business.
"You could argue that for many products. There is competition out there. It's not just one conglomerate. Competition is good," said Wiger, who had voted for the original bill creating the price floor. Peppin is in her first term.
The group representing gas station owners says the price floor protects small stations, and if it were lifted it would help big chains that undercut mom and pop operations.
The governor chose to highlight a form of mass transit as he signed the bonding bill Monday. This is from the Pioneer Press:
"Northstar commuter rail … is going to provide relief to commuters who are tired of sitting in their cars and wanted other options to be able to get to work or to their other commitments in life more quickly and more safely," [Gov. Tim] Pawlenty said during a bonding-bill-signing ceremony at the site of a future Northstar station in Coon Rapids.
He called Northstar one of the marquee projects in a $945 million construction-funding bill passed by the Legislature last week. The bill provides $322 million for the University of Minnesota and other state colleges and universities, $211 million for environmental and conservation projects, $125 million for prison expansions and other public safety institutions, and $40 million for biotechnology research facilities, including a pioneering Mayo Clinic-University of Minnesota biotech lab. It also allocates $50 million for local roads and bridges, nearly $23 million for the Minnesota Zoo and $22 million for a planetarium at the new Minneapolis public library.
While the bill signing was a big step toward getting the Northstar train rolling, it was not the last step. The $37.5 million is just a down payment the state must make this year to keep the project eligible for federal funding.
So if you thought it took a long time to get that $37.5 million you ain't seen nothing yet. The feds have to kick in $132 million and the supporters will ask the state for another $50 million next year. And you thought gas prices were high!
Where can you get free money these days? Well, only at the Capitol today. And only if you're a school kid. This is from Perry Finelli's 7 a.m. newscast on MPR:
Gov. Tim Pawlenty releases Minnesota's new state quarter this afternoon at the State Capitol. School children will be able to get free quarters and everyone else can buy $10 rolls.
U.S. Mint Director Henrietta Holsman-Fore will also be there. She said the quarters are educational.
"The quarters are introduced in the order in which the states were admitted to the union. And as you know, Minnesota is the 32nd state. So we are teaching history. We are also teaching geography and financial literacy. And as you know from the Minnesota quarter, we are teaching about the scenic beauty of the states."
Minnesota's quarter features two people fishing on a tree-lined lake, a loon and the words "Land of 10,000 Lakes." TCF Bank is the host bank for the rollout of the Minnesota quarter, which is part of the U.S. Mint's 50-state commemorative quarter program.
And finally, you've probably heard about that piece of a Northwest Airlines jet that fell off the plane and landed in a field in Dakota County. I couldn't help but notice this line in the Associated Press story:
Elizabeth Isham Cory, a spokeswoman for the FAA, said Flight 97 left Saturday from Minneapolis-St. Paul International airport bound for Honolulu. The flight crew didn't notice that the cone-shaped engine part - called a thrust reverser nozzle - was missing until the DC-10 had landed, she said.
No one was injured. The thrust reverser helps to slow planes when they come in for a landing. The landing in Hawaii was routine, Isham Cory said. She referred to the engine part that fell, which is located on the tail of the aircraft, as an "extra mechanism" that wasn't being used in the flight.
"Extra mechanism?" I don't know about you, but when I'm on the plane there's no such thing as an "extra mechanism" on the engine. Please keep all of the mechanisms on the plane!
