Two Takes: The $4.6 billion deficit forecast

Sarah Janecek: We can handle this with (almost) no new taxes!

No more guessing or nail biting: The final deficit number is $4.6 billion.

Regrettably, the seemingly intractable same lines have been redrawn. Democrats want to raise taxes, but won’t openly talk about which ones. GOP Gov. Tim Pawlenty doubles down on no new taxes, saying, "If they want to raise taxes, we’re going to have a collision."

No new taxes. I’m a no-new-taxes kind of gal (with one important exception noted below) but even I join the chorus of groans at the phrase.

Steve Perry: Can we trust the number?

My first question about the forecast isn’t where to find the $4.6 billion. It’s whether this forecast is already outdated. Its projections, by necessity, are based on economic numbers collected by the consulting firm Global Insight through early February. A lot has happened since then. For example: The 3.8 percent drop in GDP for the fourth quarter of 2008 turned into a 6.2 percent contraction last week after analysts had a chance to review the data more closely. That tells us something about the increasing speed and severity of economic decline and something about the models being used to trace what’s happening: They’ve never encountered circumstances anything like this.
Below the fold: more from Janecek & Perry.

Janecek:

No more guessing or nail biting: The final deficit number is $4.6 billion.

Regrettably, the seemingly intractable same lines have been redrawn. Democrats want to raise taxes, but won’t openly talk about which ones. GOP Gov. Tim Pawlenty doubles down on no new taxes, saying, "If they want to raise taxes, we’re going to have a collision."

No new taxes. I’m a no-new-taxes kind of gal (with one important
exception noted below) but even I join the chorus of groans at the
phrase.

The Happy to Pay for a Better Minnesota crowd
has done a spectacular job of shellacking "no new taxes" with shame,
selfishness, lack of compassion and a whole host of other socially
undesirable qualities.

Yet despite all that, Democrats haven’t
been open about specific tax increases because they know what Pawlenty
knows, what we all know. Most people think we are taxed enough, and
that no matter how much new money we have or may have thrown at
problems, it has no effect.

There is still no credible study
correlating increases in K-12 funding with measurable student
achievement. Dramatically rising health care costs is a federal
problem that the state can’t do much about

2 Responses to “Two Takes: The $4.6 billion deficit forecast”

1. Anonymous Says:
   March 7th, 2009 at 7:22 pm

   If you don’t need it, don’t buy it. If you can’t pay for it you don’t need it!

2. Anonymous Says:
   March 9th, 2009 at 8:19 am

   I’m going to disagree and say, tax internet sales first. You’ve got about $400 million right there. Small, local businesses are often the force that pulls a state out of recession. Why should we give Amazon and Netflix a taxpayer subsidy against small, local shops that are rapidly going out of business? I’m aware of the Supreme Court ruling that it wasn’t feasible to impose 7,000+ sales tax districts against online retailers, but they left the decision how to make it feasible to collect sales taxes in the hands of the Legislature. Tell Amy Klobuchar to pass the SST, so states can collect internet sales taxes.