Good and bad, big numbers shape outgoing budget official's work

ST. PAUL, Minn. — The state's top finance official announced Wednesday that he plans to leave Gov. Mark Dayton's cabinet, vacating a job that he jokes he still has trouble explaining.

Minnesota Management and Budget Commissioner Jim Schowalter will step down in mid-January, ending two decades of working with the state's budget. He's the fourth member of Dayton's cabinet to leave ahead of the governor's second term. Schowalter will head up the Minnesota Council of Health Plans.

Since he took over as budget commissioner, Schowalter has been the face of the economic forecast, the twice-annual projection of how much money the state has in its coffers — or how big of a deficit it's facing. The number that comes out of those forecasts have set the battlefield where lawmakers hash out the tax cuts and spending increases that go into the state's nearly $40 billion budget.

But what does the state's budget commissioner really do?

"I still have a hard time explaining it to my dad," Schowalter said.

OTHER WORK

Though his role overseeing the state's budget puts him in the public eye, Schowalter said it's less than half of his work. The remainder, he said, is primarily devoted to managing Minnesota's 30,000-some employees that help run the state. It makes for a behind-the-scenes job.

FORECASTS

To outsiders, an economic forecast is a twice-a-year event — once in December, and again in February — producing a big number that will shape the state's two-year budget.

But the work begins months in advance, as economists begin poring over previous forecasts to figure out where they got things wrong. A month before, state officials start folding in revenue and expense projections to figure out the size of a surplus or deficit.

Despite weeks of evaluating that number before forecast day, it rarely — if ever — leaks out before budget officials release a 100-page rundown.

Two memorable and starkly different forecasts bookend Schowalter's tenure. Last week he unveiled a $1 billion surplus. But just a month into the job in 2011, Schowalter revealed the state faced a $6 billion deficit that led to a historic state government shutdown.

Schowalter has been among Dayton's most trusted aides ever since the governor tapped the experienced budget official to help tackle a looming budget deficit in 2011.

He stayed at Dayton's side through failed negotiations with Republican lawmakers to avert a shutdown and the 20-day stretch with a shuttered government. Throughout the process, Schowalter said he remained hopeful a deal would be reached before the June 30 deadline arrived.

Nearly four years later, Schowalter had little to say about what counsel he gave the governor at the negotiating table.

"Part of the problem was that the gap was so large," Schowalter said.

LOOKING AHEAD

Schowalter said his successor will inherit a more stable economy and state budget, making a repeat of 2011 unlikely.