The messages of uncertainty continue. Housing market forecasts indicate a slowing (and maybe even price reductions) into 2023, business leaders are expressing nervousness. Contrarily, per the Wall Street Journal, “comforted by recent data, more investors are betting that the U.S. can avoid a deep and prolonged downturn.” And Steve Grove, DEED commissioner, said this past week that Minnesota's leaders should not be defensive of an economy that is humming along. "I mean 13 months of job growth. We added over 17,000 jobs last month. Lowest unemployment rate in the country," Grove said. "There's a reason for Minnesotans to be optimistic." Grove eyed the second quarter of 2023 for when Minnesota will fully return to pre-pandemic job levels. It needs about 35,000 more people working to reach that level. Minnesota does possess historically low unemployment rates, with Mankato leading the nation with a 1.3% rate this fall.
All of this in a context defined by a “silver tsunami” now upon us; birth rates that continue to decline since 2007; and today’s workforce that can live anywhere they like.
Whether we’re talking government, business, or personal budgets, what I know for sure is that we’ve got challenges ahead. The state has announced an historic $17.6B budget surplus going into the FY 2024-25 biennium, which requires real work to hammer out how to invest thoughtfully. Cities like St. Paul and Minneapolis are increasing their levies, putting renewed pressure on family budgets. This dynamic of local tax increases and statewide abundance sets us for a very interesting legislative session in 2023, indeed!
Governor Walz recently was interviewed by the Star Tribune and hinted in this article that “circumstances may necessitate grabbing tools – including tax cuts and direct incentives to businesses – that area rarely used by Minnesota democrats.” Now definitely is the time to use these tools. I agree with Doug Loon’s comments here: “the state’s massive budget surplus is an opportunity to update the state’s tax code to make Minnesota more attractive to businesses.” I also am looking forward to Governor Walz recommending significant one-time infrastructure investments using the one-time surplus money.
We’ll keep you posted.
See you in the trenches.
Because I so appreciate the Citizen League: I wanted to make sure you saw that Citizens League just released a new report. This report explores why people run, decline to run, remain serving, or step down from office, and the impact on local government. See more in the email below and read the full report here.
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