Minn. economist sees even larger near-term deficit
St. Paul, Minn. — (AP) - State economist Tom Stinson is telling lawmakers to expect Minnesota's short-term budget hole to grow by $30 million to $70 million.
Stinson says more bad news about job losses wasn't fully factored into last week's economic forecast.
He told the Senate Taxes Committee that a report on Friday showed that the U.S. economy lost many more jobs than anticipated, which means consumer spending will fall faster than expected.
That will hurt state sales and income tax collections and probably taxes on corporate profits.
Lawmakers and Gov. Tim Pawlenty are looking at cuts to local government aid and other items to fill a predicted $426 million shortfall in the budget year that runs through June.
Finance officials are projecting a $4.85 billion deficit for the upcoming two-year budget cycle.
(Copyright 2008 by The Associated Press. All Rights Reserved.)