Bad economic news for Mitchell

The state Department of Labor just came out with its unemployment numbers for January, and the news is bad. Mitchell’s unemployment rate shot back up to 5.8 percent, from 5 percent in December.

That’s a non-seasonally adjusted rate, meaning that the statistical impact from seasonal employment trends is not removed. The non-seasonally adjusted statewide unemployment rate rose from 4.9 percent in December to 5.5 percent in January. Nationally, the non-seasonally adjusted unemployment rate rose from 9.7 percent in December to 10.6 percent in January.

Mitchell’s January rate was tied with Sioux Falls’ rate for fourth-worst among the state’s largest cities, after Watertown at 6.6 percent, Rapid City at 6.5 percent and Yankton at 6.3 percent.

To see a full copy of the state’s new labor bulletin, click here.

5 thoughts on “Bad economic news for Mitchell

  1. Economists believe our national economy is showing signs of rebounding, but warn of a possible second recession settling back in during early 2011 when the Obama Care stimulus money runs out. A review of 1929-39 economic history shows three distinct recessionary periods. History often repeats itself. Elected officials and public administrators must continue to conservatively plan for the worst while hoping for the best.

    The following economic information shows where we are today:

    1. In 2009, SD’s non-farm incomes declined by 0.2 % for the first time since 1939. During the same time period, the cost of medical services and health insurance continued to spiral upward reducing consumer discretionary spending even further with consumer confidence tanking to depression era levels.
    2. In 2009, SD’s unemployment insurance trust fund was tapped initiating a mandatory additional assessment on all employers in 2010.
    3. During the first 8-months of 2009-10, SD sales tax revenues declined by 4%. When the current SD budget was hammered out last year the experts over-estimated 2009-10 sales tax revenues by about $23 million. The same experts believe 2010-11 sales tax revenues will increase by 2.9%. The 2010-11 sales tax revenue projections may be over-inflated.
    4. $40 million in spending cuts are being trimmed from the SD 2010-11 budget.
    5. In January 2010, the nation’s unemployment rate (UR) increased from 9.7% to 10.6%; SD’s UR increased from 4.9% to 5.5%; Mitchell’s UR increased from 5.0% to 5.8%.
    6. In 2010-11, SD state employee wages will remain frozen at 2008-09 levels.
    7. In 2010-11, the remaining balance the Obama Care stimulus funds will be spent.
    8. In 2010-11, state funding for education will not be increased by the normal 3% nor the 1.2% inflationary amount (the lesser of 3% or the rate of inflation). Due to a $40 million state revenue shortage, legislators chose to ignore the education funding statute when they voted to freeze state funding for education at 2009-10 levels.
    9. In 2011-12, at least $100 million in spending cuts will need to be trimmed from SD’s future budgets until more prosperous times return and state revenues increase.
    10. SD State funding for education may be cut by 3 to 5% in 2011-12 and future years until more prosperous times return and state revenues increase.

    In June 2008, Supt Graves recommended approving an MEA agreement increasing each K-12 educator’s salary by $2,100 each year over the next 3-year period ($2,100 in 2008-09; $4,200 in 2009-10; and $6,300 in 2010-11). Current board members Price & Putnam approved the MEA agreement increasing K-12 payroll by nearly $4 million over the 3-year period. During an Apr 2009 school board meeting, I asked Graves how far out he looked in preparing a budget. Graves replied, three to five years. I asked Graves if he had seen any of the late 2007 and first half of 2008 economic indicators. Graves replied that there were no signs predicting these hard times. There was no way to know in advance. You may have seen some warning signs or hard-times forecasts, but we did not see any before approving the 3-year payroll increases. Evidently, Graves had his head buried in the snow drifts. During late 2007 and the first half of 2008, falling residential real estate market prices, economic contraction indicators, and recession forecasts were continuously discussed in newspaper and magazine articles. Daily news coverage of the presidential campaigns shared similar hard-times warnings.

    The 2008 payroll hike was approved based on the false assumption that state funding for education would continue to increase by 3% each year (an annual $500,000 General Fund increase). Graves has decided to continue to gamble with the District’s financial future just as he has done over the past two years when he recommended: (A) Increasing K-12 payroll by nearly $4 million over a 3-year period, (B) Spending $1 million of Capital Outlay funds as a down payment on the $13,000,000 new school, and (3) Leveraging 100% of the cost of the new Quintal Field project (adding on another $3,000,000 in long-term debt payments when Capital Outlay was already over-burdened with 75% of its annual revenue committed to paying existing debt and lease payments). In Mar 9, 2010 TDR articles, Graves shared his future financial plans: (A) Try to maintain current spending levels, (B) Try to avoid additional program and staff cuts, (C) Increase 2010-11 K-12 payroll expenditures by $650,000, (D) Spend part of the District’s $3 million cash reserve, and (5) Use the District’s $700,000 opt-out increasing local property taxes. Evidently, Graves still has his head buried in the snow drifts.

  2. Here we go again! Different Guymon, same results. I quit visiting this blog the last time we had a school board campaign. This blog is not a soap box for running for school board. Please take your campaign elsewhere.

  3. Like it or not, what the Guymon’s have said does make sense much of the time. You can’t just tune them out. Also, will you please leave the Catholics out of this whole thing? The last time I checked any resident of Mitchell has the right to run for school board regardless of church or non-church affiliation. At least we know where the Guymon’s stand and they are not always wrong nor are they are not afraid to sign their names.

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