♪♪ >> OUR NEXT TOPIC ALSO HAS UNCERTAINTY WITH THE FEDERAL GOVERNMENT AND FUNDING AND CUTS AND JOBS AND LAYOFFS.

HERE, COMMISSIONER MATT VARILEK FROM THE DEPARTMENT OF EMPLOYMENT AND ECONOMIC DEVELOPMENT.

BIG PICTURE, YOU HAD JOBS NUMBERS OUT BUT THOSE JOBS WERE NOT REFLECTIVE OF THE FEDERAL LAYOFFS YET.

HOW MUCH, HOW BIG, HOW UNKNOWN IS IT?

>> IT'S A REALLY INTERESTING TIME RIGHT NOW WHERE WE HAVE LOTS OF UNCERTAINTY AT THE FEDERAL LEVEL WITH TARIFFS ON AND OFF, WITH BIG CUTS AT FEDERAL AGENCIES, WITH FEDERAL INTERRUPTIONS OF GRANTS TO ENTITIES LIKE PBS, FOR EXAMPLE.

THOSE NUMBERS, THOUGH, THAT WE ISSUED IN MARCH DON'T YET SHOW THE RESULTS OF THE LAYOFFS BECAUSE IN A LOT OF CASES ANNOUNCED LAYOFFS STILL INVOLVE PEOPLE WHO ARE ON THE JOB.

SO THAT WILL SHOW UP IN THE MONTHS AHEAD.

THE GOOD NEWS FOR MINNESOTA IS THOUGH THAT OVER HE LAST COUPLE YEARS WE'VE BUILT UP REALLY AHEAD OF STEAM IN TERMS OF ECONOMIC PROGRESS AND WE ANNOUNCED THAT WE ADDED 10,000 JOBS IN THE STATE OF MINNESOTA, WHICH S I THINK IT WAS 0.4% VERSUS 0.1, THE NATIONAL AVERAGE SO WE'RE LOOKIN' REALLY GOOD.

>> FOR NOW THOUGH, RIGHT?

BECAUSE THE FEDERAL GOVERNMENT'S WHAT, TOP THREE, TOP FIVE MPLOYER IN THE STATE?

OR HAS IT DROPPED DOWN?

USED TO BE ONE OF THE TOP EMPLOYERS.

>> 18,000 FEDERAL EMPLOYEES IN MINNESOTA IS THE NUMBER THAT I'M FAMILIAR WITH.

AND SO THERE IS THE EMPLOYMENT IMPACT OF JUST BEING WHO NO LONGER GET A PAYCHECK EVERY DAY BUT THEN THERE'S ALSO THE SERVICES IMPACT OF PEOPLE WHO ARE NO LONGER HELPING OUR VETERANS WITH THE THINGS THEY NEED AT THE V.A.

OR, YOU KNOW, I'M A FORMER FEDERAL EMPLOYEE MYSELF, I WORKED FOR THE U.S. SMALL BUSINESS ADMINISTRATION AND THEY'VE TAKEN SOME CUTS AND WHO'S HELPING THOSE SMALL BUSINESSES ET THE LOANS THEY NEED.

OF COURSE WE HAVE RESOURCES AT D.E.E.D.

THAT WE WANT TO HELP WITH, BUT CERTAINLY THERE WILL BE A LOT OF IMPACTS BOTH ON THE EMPLOYMENT SERVICE AND THE -- AND THE SERVICES SIDE FROM THE FEDERAL.

>> BASED ON YOUR EXPERIENCE WHAT UNIQUE VIEWPOINT DO YOU HAVE ON THIS?

>> IT'S PUBLIC SERVICE RECOGNITION WEEK RIGHT NOW IRONICALLY AND THAT IS THE WEEK OF THE YEAR WHEN WE MAKE A POINT OF THANKING ALL OF THOSE WHO ARE GOVERNMENTAL EMPLOYEES FOR THE WORK THEY DO.

I WORK ALONGSIDE THEM, I SEE THE DEDICATION, A LOT OF CASES PEOPLE HAVE TALENTS THEY COULD PROBABLY MAKE A ON LOT OF MONEY ELSEWHERE BUT THEY CARE ABOUT MAKING MINNESOTA A BETTER PLACE.

THAT'S WITH WHERE IT HITS HOME WHEN WE SEE IMPACTS TO LIVES AND PAYCHECKS BUT EVEN THE WAY WORKERS ARE SPOKEN ABOUT.

IN MINNESOTA WE HONOR THEM.

THE GOVERNOR HAS ROLLED OUT THE WELCOME MAT FOR DISPLACED FEDERAL WORKERS O SAY WE WANT YOU HERE IN MINNESOTA.

>> THERE'S STILL JOB OPENINGS AND YOU'RE ACTIVELY RECRUITING SOME OF THOSE FEDERAL WORKERS, BUT PART OF THAT WHEN THEY COULD BE REMOTE.

IN PERSON MIGHT BE A LITTLE HARDER.

>> YEAH, EVERY EMPLOYEE HAS TO MAKE THEIR DECISION ABOUT WHAT KIND OF FLEXIBILITY THEY THINK IS NECESSARY AND IT'S TRUE ON A CASE BY CASE BASIS IN SOME INSTANCES WE HAVE DEPARTMENTS THAT ARE HIRING, FOR EXAMPLE AT D.E.E.D.

WE ARE STILL IN THE PROCESS OF STANDING UP THE NEW PAID LEAVE PROGRAM WHICH A LOT OF PEOPLE ARE VERY EXCITED ABOUT.

ON THE OTHER HAND, PROGRAMS THAT ARE FEDERALLY FUNDED AND MAYBE HAVE HAD THAT FUNDING GO AWAY, IN THE CASE OF OUR COLLEAGUES AT MINNESOTA DEPARTMENT OF HEALTH, I THINK THEY LOST 170 PEOPLE BECAUSE THE RUG WAS PULLED ON SOME FEDERAL FUNDS THAT HAD BEEN COMMITTED.

>> AND THEY'RE NOT YET ON UNEMPLOYMENT ROLLS FOR YOU.

>> I BELIEVE THEY'RE STILL WORKING SO, YES, THEY'RE NOT SHOWING UP YET IN UNEMPLOYMENT FIGURES.

WE'LL HAVE NEW NUMBERS I WANT TO SAY MAY 15TH SO WE'LL SEE IF THEY'VE SHOWN UP THERE YET.

WE'RE IN THAT IN-BETWEEN TIME, YOU LOOK THE ACONSUMER CONFIDENCE WHICH IS NOT SO GOOD, THE GYRATIONS IN THE STOCK MARKET.

AGAIN, TARIFFS, TRADE IMPEDIMENTS ARE ONE THING AND UNCERTAIN TRADE IMPEDIMENTS THAT GO UP AND DOWN, YOU DON'T KNOW WHAT NUMBER TO PUT IN YOUR SPREADSHEET TO DECIDE IS THIS A GOOD BUSINESS DECISION OR NOT.

FOR EXAMPLE THE GOVERNOR AND I WERE AT PHILLIPS IN PLYMOUTH AWHILE AGO ANNOUNCING A $31 MILLION EXPANSION THEY'RE DOING.

IT'S A DUTCH COMPANY.

UP IN DULUTH $200 MILLION INVESTMENT BY SOFIDEL, A PAPER COMPANY, AND THESE WERE INVESTMENTS WHERE THE STATE PROVIDED FUNDS TO HELP MAKE THEM HAPPEN AS WELL.

>> HOW ARE AGENCIES LOOKING AT STATE BUDGETS, HOW IS IT LOOKING IN THE HOUSE AND SENATE FOR YOU?

>> IT'S GOING TO BE QUITE THE TRANSITION FROM THE POST-2023 SESSION WHERE WE HAD ONE-TIME DOLLARS THAT WE HAVE MADE EXCITING INVESTMENTS IN.

AS EXAMPLES OF HOW YOU CAN USE SOME OF THOSE ONE-TIME DOLLARS THAT'S PARTLY WHAT WE USED FOR BUSINESS INCENTIVES TO ACHIEVE SOME OF THESE HUGE JOB INCREASES WHICH WILL YIELD TAW RESOURCES DOWN THE LINE.

NOW IN THE NEXT BIENNIUM WE WERE ALREADY SET TO GO DOWN A LOT BECAUSE ONE-TIME RESOURCES WOULDN'T HAVE BEEN THERE AND THEN DEPENDING ON WHAT ULTIMATELY GETS AGREED IN TERMS OF TARGETS, CHANCES ARE WE MAY SHRINK SOME MORE.

AND THE GOVERNOR HAS PROPOSED WHAT WE THINK ARE REASONABLE, RESPONSIBLE REDUCTIONS WHILE PROTECTING SOME OF THOSE CORE INVESTMENTS AND SO WE KNEW THIS WAS IN THE CARDS.

THE QUESTION IS WHERE WILL THE CUTS OCCUR AND JUST HOW DEEP.

>> AND DO YOU HAVE TO COME BACK FOR SPECIAL SESSION WHEN YOU REALLY KNOW THE IMPACT OF FEDERAL LAYOFFS AND CUTS?

>> WELL, IT'S GOING TO BE AN EVOLVING PROCESS OVER TIME.

WE HAVE THE STATE DEADLINES OF MAY 19TH ND POTENTIAL SHUTDOWN AFTER THAT.

AND WHEN A FEDERAL BUDGET GETS TOTALLY WRAPPED UP VERSUS CR,