Economic forecast still grim

Economic forecast still grim


Panel says jobs won’t recover until summer
By Mal Leary
Capitol News Service

AUGUSTA, Maine — State revenues continue to fall below estimates, bolstering the position of the state Economic Forecasting Commission that it will be next year before there are solid signs of the economy recovering.

“The good news is that the worst of it is over, in terms of the fall of the economy,” commission Chairman Charles Colgan told members of the Legislature’s Appropriations Committee. “The bad news is the worst was really bad.”

Colgan, an economics professor at the University of Southern Maine, said the decline of 17 percent in personal income in the first quarter of this year is the worst since income numbers have been kept, and that goes back to the Depression era of the 1930s. He said that as federal officials release actual numbers, it’s clear last year’s economic downturn was in many ways unprecedented.

“And we are not out of it,” Colgan said. He said the best estimates of the commission — based on economic models from two national groups as well as its own models — are that the state will not see a growth in jobs until next summer.

“We are not quite sure whether it will be sometime in the early summer or the late summer,” he said. “But that still looks to be the turning point on the employment.”

Colgan told lawmakers that changes made by federal agencies in their measurements of the economy have had a dramatic impact on the commission numbers. For example, he said, the commission thought wages and salaries in Maine had fallen about 1.7 percent in the first quarter of this year, only to find out last month they had dropped 17 percent.

Colgan stressed to lawmakers that the economic recovery, while it may have started, will take a long time to happen in Maine. He said that even after the economy starts to have net job growth next year, it will be several years before employment in the state is back to the level it was before the recession started.

All of the economic data from the commission will be used by the Revenue Forecasting Committee later this month to re-project state revenues. Lawmakers are sure it will not be good news.

Rep. Emily Cain, D-Orono, House co-chair of the Appropriations Committee, said the panel knew Gov. John Baldacci’s use of a projected $200 million shortfall in revenues was a guess.

“I don’t know how bad it will be, but we are all preparing for a big number,” she said. “We know it will probably be in the $300 million range.”

Sen. Richard Rosen, R-Bucksport, the only GOP senator on the panel, said Republicans on the panel certainly have expected the revenue shortfall to be higher than the $200 million level. He said until the forecast committee completes its work, everyone is guessing.

“Our caucus has been focusing on the $30 million exercise that we gave ourselves,” he said. “We know we will be facing a huge challenge with the supplemental budget, once the governor submits it next month.”

Both Cain and Rosen said the economic bad news from Colgan was not unexpected. They have been hearing from constituents for months about the impact of layoffs and the closing of stores and other businesses across the state.

Finance Commissioner Ryan Low said that while it will be later in the month before state revenue numbers are finished it appears October revenues were “about as bad” as the $28 million shortfall in September with major revenue sources failing to meet estimates.

“It’s looking bad,” he said. “What we have seen so far is that October is looking more like September, more like May and June. We will have to wait and see what the real numbers are in a few days.”

The Appropriations Committee meets again next month after revenues are re-projected to complete work of finding $30 million in cuts for the second year of the budget. A few weeks later they will receive the governor’s plan for dealing with the revenue shortfall.

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Comments
16 comments on this item

plenty of jobs in medical coding, get your degree in medical coding and get a job in medical billing. it is easy and i did it myself at http://bit.ly/14YX8y

you can thank the govenor for this mess we're in, thank god he,s leaving and he aint comming back!!! in the mean time, we're still the highest taxed and the poorest state. they dont care if your unemployed. hungry, homeless, as long as you scrape up enough money to pay your taxes.jobs here in maine right now? look at the papers help wanted ads, not that many for so many people out of work. no jobs, crime goes up. thanks gov, you da man, NOT!!!!

Time for TABOR!!

It's time to quit with the gimmicks and temporary fixes. They need to fundamentally change how the state government works. It's time to permanently reduce the size and scope of the state government. It's time for it to finally sink in that the state can't be the fairy godmother to magically fix all your problems.

You can thank the 'tax & spend' party that s driving the state in the hole for years.

How's that 'hope & change' working for you so far Maine ? think about it as you vote today.

This past year our government failed us here in this state by passing question one 1. Look at all the money and division it has created.

They should have been looking on how to help the citizens of Maine in this economic hard times and not trying to find ways to screw the

Maine people into paying new or more taxes. Like the bill they wanted to register canoes etc. It's time to STARVE THE BEAST!!!!!!!!!!!

Those of us in the private sector have been taking some major hits, while those sucking off the tax dollars keep living large... just look at www.MaineOpenGov.org for the proof.

Hence, this is one more reason why

YES on Q.2 and YES on Q.4

are the best ways for us non-governmental workers to vote today. Our various forms of government are speeding down the track like an out-of-control train looking for a place to crash... we need to stop this train before it destroys what we all call home.

Please vote today!

Until Maine folks understand that the liberal welfare machine hard at work in Augusta is bound and determined to make Maine the welfare arm pit of America, this is what you'll get folks. Elect conservative people who will focus on creating jobs and attracting small private and medium size (READ: not large) to Maine. Until that happens, expect the downward spiral to continue. We have some great people in Maine who just want to work. TEST: If a politician's FIRST and MOST IMPORTANT objective is TO CREATE JOBS, vote yes. If a politician wants to focus on diversity, more free welfare crap and handouts, social justice and all that other horses___t, VOTE NO! Passing TABOR would be a good step in the right direction. It would send a message to the free-spending folks who like to free-spend with your checkbook that the party is over. That alone might cause them to go home. Stop blaming Augusta folks. CHANGE IT! It's not up to them, it is UP TO YOU! It'll take a few years but if you are diligent, you will purge the turds that are focused on 'social justice' and get good business focused people who will do whatever it takes to attract new business to Maine and say NO to any legislation that will be counter-productive. Gov Baldacci had a chance. You would think someone from a working class background would understand what needs to be done. obviously not. Join the Republican Party or join the Libertarians or any conservative group and deep six this DEMONcratic welfare mentality. Have you walked around any of our larger cities lately? We're starting to get some of the worst transient trash you've ever seen. Where are these people coming from? What is bringing them here? Whatever it is, cut the programs that make it attractive and maybe they'll go away. Welfare should be for folks who are old, ill, and truly deserving. I have a feeling that a lot of people are relocating here from cities like Boston, etc because it's easier to work the system. We can change Maine for the better if we just wake up and start telling it like it is.

Happy talk from elites - a hard rain is about to fall. The recession is NOT over and the second down leg is before us. Jobs continue to drop at a rate of over 2-1/2 million real jobs a year, (the only jobs that were created were government jobs), commercial credit entities are filing chapter 11 at record rates, home prices are still dropping, all the NY banks are insolvent if they were required to account for their investment losses, (GAAP accounting rules were changed in March to allow them to put these aside and off their books), credit card defaults are nearing 10%, a tidal wave of foreclosures are about to hit in the next quarter, state budgets are being cut, the 5th largest bank (CIT) just failed last week, GM needs more government cash to operate for the next year, the dollar is dropping which will force energy prices to rise, no social security increases for another 2 years and the account goes negative in 2015, mediaid and medicare are operating in the red with $100's of billions transferred to the national deficit, the stimulus moneys will run out in 2Q/2010, the national debt limit will next week be extended to over $12 trillion ($200 billion in annual interest cost - $800 billion by 2019), and Obama forcasts that the annual deficit will be over $1 trillion per year for the next decade, .. and the next hint of inflation will cause interest rates to flare. Can you imagine what per year interest costs will be on $12 or $20 Trillion of very short-term debt will be when it's has to be rolled over to 5% interest? Can you say goodbye kids?

Drain the swamp............less money for our leftist, indoctrinatiing universities................................WAY overdue for that.

Don't worry, be happy!

@ How does being A (( Republican Independant and Libertarian )) work for Ya All @

((( That be My Melting Pot of Decision Making ))) ((( :~o) ))))

The Congressional Budget Office reckons the Obama administration's planned budgets would increase the debt-to-GDP ratio from 41 percent in 2008 to 82 percent in 2019. Higher interest rates would aggravate the debt burden. Anticipating higher rates, the CBO estimates annual interest payments on the federal debt at $799 billion in 2019, up from $170 billion in 2009.

Let me translate that for you, in just 10 years, $800 billion divided by a population of 300 million = $2666 per person. Even worse, because only 1/2 of the US population pays taxes, that would be double or about $5350 per year. And that is just interest payment for the accumulated debt each year and every year .. not counting more taxes to account for the overdraft in social security, medi-care, Medicaid, Obama's universal health plan, Obama's cap and trade bill, supplemental spending bills for wars, increasing unemployment payments, and tax hikes necessary to make good on underfunded state pension plans.

And yet the beat goes on.. our good hearted neighbors keep voting and nudging politicians to increase more borrowing for goodies we can't afford.

I loves da hopey-changey!

A welfare state still needs to be fed by SOMETHING. Don't you want to TRY to get business to come in here, if only to fund your elaborate dole??

As they say up in Aroostook, "We ain't outa the woods, yet!"

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