Officials: Fiscal Cliff Would Harm Minn. Economy
ST. PAUL, Minn. (AP) — Minnesota budget officials say the state’s economy would be hit hard if President Obama and Congress can’t strike a federal debt deal to avoid the so-called fiscal cliff.
The warnings from officials at Minnesota Management and Budget came Wednesday as they announced their economic forecast. The agency says Gov. Mark Dayton and state lawmakers face a projected $1.1 billion budget deficit next year, the smallest in some time.
But State Economist Tom Stinson says that would get considerably worse under a fiscal cliff scenario in which federal spending cuts and higher income taxes take effect. He predicts the state would shed 115,000 jobs in 2013-14, and personal income would drop more than 4 percent by 2015. He also says state tax revenue would drop by hundreds of millions of dollars.
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