The new revenue forecast shows the state has a slight surplus. That's good news, right? Maybe not.

First the good news. The $181 million in projected extra money means the state can finish undoing that shift in school payments it used to balance the budget a few years ago. That leaves $88 million in surplus.

But to get to that figure the state is counting the $400 million its collectiong from the 75 cent per pack "health impact fee" on cigarettes, even though a judge has thrown the fee out. If the state Supreme Court agrees that the fee is unconstitutional, it leaves Minnesota not with an $88 million surplus but with a $312 million deficit. That's the bad news.

But wait, there's more good news. The budget reserves are full again and there's $317 million in a "tax relief account." And if times get bad the state can always shift those school payments again to make the bottom line look better.

But the real bad news is contained within the forecast. Simply stated it's where are the jobs?:

Job growth in Minnesota continues to be weaker than would be expected at this point in an economic expansion. In the four years since the end of the recession, payroll employment has increased by just 2.3 percent. In the four years following the end of the 1990-91 recession, employment grew by 11 percent.

Since November 2001 Minnesota's economy has added 56,000 jobs or about 14,000 per year. In the 49 months following the end of the 1990-91 recession employment in Minnesota was up by 237,000 jobs or nearly 60,000 per year.

Is this drop in job growth a temporary glitch or a permanent feature of Minnesota's new economy? That's a question you may want to put to candidates as they knock on your door this summer.

As you might expect, the nature of the forecast is sparking a political debate, as noted by MPR's Laura McCallum:

"The forecast, although slightly positive, is clearly only an inch deep in terms of the positive nature of it. Underneath that thin layer of ice are some very significant problems," according to [St. Paul DFL Sen. Dick Cohen.]

Republican leaders mocked Democrats' pessimism, and say the state is on solid financial ground after years of reining in spending. Now that there's a surplus, leaders on both sides of the aisle are proposing ways to spend it.

Listen to Midday Wednesday for more on the surplus and the session. I'll be at the Capitol along with Gary Eichten and crew. As usual, on the first day of the session we'll talk with dozens of lawmakers about what they think will happen.