Tracking your interests: state deficit, oil prices, state workers

Good news: State's deficit is only $5 billion for year ended June 30, 2013.

That came yesterday in new state revenue forecast. Our local story mentioned legislators who seemed to be feeling a bit more optimistic yet noting $5 billion is still a big number.

FP editorial take for Wednesday edition: Political leaders: Be optimistic. It will be easier to compromise now, 20 percent easier in fact. But we believe the "mandate" if there was one from the last election is to "compromise, work together, to solve the problem."

It's hard to argue it wasn't some of that. The guy who advocated tax the rich got the most votes. It's a stretch of logic to say a lot of people think it should be all cuts.

State economist Tom Stinson makes relevant point about why we improved our situation. Income taxes made up by half of it, about $500 million, sales tax was ahead by $285 billion. He cites Obama/Republican tax extension and unemployment benefit extension.

Also. Corporate profits are up.

Again, I like Doug Grow's story from MinnPost on the issue as the best Minnesota story.

Oil prices threaten 

Oil prices seem likely to skyrocket this year, which Stinson says could hurt our revenue projection. The more we spend on gasoline, the less we spend on small town cafe's going out to eat, etc. We hit KFC instead of Olive Garden.

Only thing that could temper oil prices: We learned to cut back consumption in 2008. Can we do it again, as consumers?

Also, the willingness of U.S. and Europe to sort of secure Libya so immediately surprised me. This is not a negotiation. That may bring some stability to the oil market.

But as this commentary from Tom Reilly, SCS Commodities, (click on "energy" tab below video screen) at the CME reports, that tensions in the Middle East, which he says won't end any time soon, oil futures will continue their march to 100 a barrell, and possibly $110 by Memorial Day translating to $4 per gallon prices at the pump.

State worker risk

Another important story for the Mankato economy is that a recent Free Press story on state workers show Nicollet and Blue Earth County has a large number of state workers, 3,372 in all, and Nicollet County has the highest number of state workers per capita in the state.

Any drastic cuts to those numbers, will clearly influence consumer spending at the local level.