Editorial: Stimulus helped state

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Editorial: Stimulus helped state

Updated: August 27, 2009 - 7:03 PM

A 'rough ride,' but federal money helped cushion the blow.

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The recession has been "a very rough ride" in Minnesota, a state finance official told a legislative commission this week. But in large part because of federal stimulus money, "our horizon is getting to a place where revenues are more normal," state Budget Director James Schowalter said.

Some $830 million has already been spent in Minnesota out of an expected federal recovery outlay of more than $4.7 billion by the end of 2010, Schowalter and state Finance Commissioner Tom Hanson reported. The jobs impact is still being tallied, but it includes more than 2,900 transportation construction jobs, nearly 6,000 summer jobs for youth, and 82 additional staff members at state Workforce Centers to assist job seekers.

A few months ago, some partisan voices were raised in other states claiming that the federal American Recovery and Reinvestment Act was not working. No such argument came from state finance officials. When Senate Majority Leader Larry Pogemiller asked Hanson whether his boss, Gov. Tim Pawlenty, wishes he had rejected any portion of the federal money, Hanson's short answer was "No."

"Some states are still in free fall and aren't sure how to plan," Schowalter said. With an unemployment rate in July at 8.1 percent, compared with 9.4 percent nationally, Minnesota's economy appears to be stabilizing. While "it will take several years for all of the states to work through their problems" stemming from this recession, he said, "I feel almost lucky."

His "could-be-worse" assessment to the Legislative Commission on Planning and Fiscal Policy was tempered by a projection that the number of jobs in Minnesota won't again match January 2008 levels until January 2013. It's chilling to think how much longer and deeper that jobs trough would have been without the federal boost.

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