Minnesota's economy is good, but. . . .
ST. PAUL - Minnesota's economic numbers look good, but they don't tell the whole story. For instance, the state added 54,700 jobs through October of this year. There are 2.3 percent more jobs than in 2001. The state's employment is growing faster...
ST. PAUL - Minnesota's economic numbers look good, but they don't tell the whole story.
For instance, the state added 54,700 jobs through October of this year. There are 2.3 percent more jobs than in 2001. The state's employment is growing faster than the national average.
However, state economist Tom Stinson sees a dark side.
Prices are expected to increase faster than earlier thought. A slumping housing market hurts the state's wood products industry. And there always is a threat of terrorism, large oil price increases or other events out of Americans' control.
"There is more money than there was last February, but there is more risk as well," Stinson said Wednesday when state officials revealed the state expects a $2.2 billion budget surplus.
Stinson said the housing situation is an indicator of problems.
Permits to build new Minnesota houses are down 37 percent from a year ago.
"We don't see any significant improvement soon," Stinson said.
That means more trouble for the state's forestry and wood processing industries, he added.
Those industries have lost 2,000 jobs recently, and a slumping housing market will mean worse trouble.
Sen. Tom Bakk, DFL-Cook, said Iron Range legislators are working with industry leaders to find a way to improve the situation and may ask the state Legislature for help.
"We can't provide the total answer," Bakk said about lawmakers, but added that the state could help.
Three wood products plants have closed, reducing property tax revenues available to local governments. A further slump would not just affect northern Minnesota forest areas, Bakk said, since most of the 68,000 wood products workers are in the Twin Cities.
Incoming House Majority Leader Tony Sertich, DFL-Chisholm, said part of the housing problem is tied to property taxes that have increased dramatically in recent years.
"People are being priced out of being able to live in their own homes," Sertich said.
Besides the housing slump, Stinson said, record-high corporate profits could be coming to an end. Those profits helped fuel the state budget surplus.
"We're concerned about the corporate profits situation," he said.
Motor vehicle sales tax receipts indicate a decline in car sales, another major economic indicator. A rebate, as is being discussed in light of the big surplus, would provide the economy a little boost right away, Stinson said, adding it would get lost in the state's overall economy.