Minnesota Lawyer
State Economist Laura Kalambokidis knows her job has a steep learning curve. “There is hard stuff I am learning every single day,” she says. “I don’t want to understate how much.” (Staff photo: Peter Bartz-Gallagher)
State economist settles into tough new job
Say this for new State Economist Laura Kalambokidis: She has a sense of humor.
Early in an interview, she is asked how her multi-syllabic name is pronounced. “LORE-ah,” she dryly replies.
Good humor likely will come in handy. Kalambokidis, 49, not only has recently taken over for Tom Stinson, one of the best liked, most knowledgeable and skilled state employees of recent times. But, as state economist, Kalambokidis knows she also has a nettlesome job with a steep learning curve in front of her.
She is well aware how much there is to learn.
“There is hard stuff I am learning every single day,” she says. “I don’t want to understate how much. A few things are behind me now, but every week there is something new.”
The job is relatively well defined. The office of the state economist, housed inside Minnesota Management and Budget, produces twice-yearly forecasts and quarterly economic updates for the Legislature and executive branch. It also produces monthly revenue reports that assess how revenue receipts track against earlier forecasts. In other words, the office continually monitors the state’s economy.
But being defined is not the same has lacking challenge, and she will face plenty. Not the least of those will be incorporating a new fourth tax bracket for higher-income Minnesotans into her economic forecasts, which is just one of several tax code features following the state’s first major tax overhaul in decades.
She will not do all that alone. Her staff includes long-time analysts and researchers John Peloquin, Matt Schoepner and Joe Gervais, and they will do a lot of the heavy lifting. “They are the brain trust here,” she says.
But Kalambokidis (“ka-lom-bo-KEE-dis,” by the way) is the leader and public face of her office, and when economic forecasts are produced that hearken economic gloom, political tensions can mount. Her predecessor, Tom Stinson, was once publicly scorned by former Gov. Tim Pawlenty in a StarTribune op-ed for what Pawlenty decried as the economist’s overly pessimistic tendencies. Stinson also ran afoul of the Republican governor when Pawlenty was running for president. Stinson vocally supported the federal government’s stimulus program — anathema to the Pawlenty campaign.
Kalambokidis admits she was wary before taking the job four months ago — she still has a lot to learn about the intricate interconnections in Minnesota’s economy.
Meanwhile, people want to learn from her. Every few days, she says, she gets an invitation to speak to a group that is interested both in hearing her out and bending her ear.
“It is fascinating and it’s fun,” she says. “And it is stretching all of my economics muscles to shift those gears and to build that human capital and build that knowledge. I am grateful to the staff of the Economics Analysis division and everyone else here at MMB who is helping me learn that stuff.”
Resonant economics
Her economics muscles were well honed before she accepted the state job.
Kalambokidis is a product of Washburn High School in Minneapolis, and her father was a political science professor; her mother was a computer systems analyst. Having developed an ambition to take part in public policymaking at an early age, Kalambokidis thought she would follow her father into political science.
He dissuaded her. “My father actually encouraged me to try economics,” she says. “He said, ‘If you major in economics, you can do the same kind of work that you want to do, but you will have the technical skills.’”
At the time, political science was a less data-driven pursuit than it is today, she says. “Economics required significantly more math and statistics in computer science,” she says. “Once I started taking economics, it really resonated with me.”
Economics provides a structure and analytical framework for public policy problem solving, Kalambokidis says. It removes the heavy emotions that sometimes flood policymaking. “You can distill out some of the noise, so that you have some ideas to work with,” she says. “I like that.”
After college, Kalambokidis went to Washington, D.C., and took a job with the U.S. Treasury Department’s Office of Tax Analysis, where among other projects she analyzed proposals to replace the income tax with either a national sales tax or a flat tax.
That job spanned the Clinton years in Washington — though that was purely coincidental, she says. “I was not a political appointee,” she says. “I was a civil servant.”
In 2000, she and her husband, Nick, moved with their family back to Minnesota. She joined the University of Minnesota as an Extension economist in the Department of Applied Economics — the same department that employed Stinson during his entire tenure as state economist.
Like Stinson, Kalambokidis is a contract employee at MMB and will continue in a dual role, working on faculty at the U of M while maintaining her state economist job.
Her academic specialties include community economics and public finance, and she has conducted research on the effects of federal and state taxation on business, as well as consumption taxation and tax compliance.
Some of her previous work brought her into direct contact with state government. She is listed among the six authors of a 2011 Department of Revenue report on tax expenditures — sometimes less formally known as “tax loopholes.” The report advocated factoring tax expenditures into the biennial budget process and making tax breaks more transparent to the public.
It can be a touchy subject. In 2010, for example, former Rep. Keith Downey, R-Edina, proposed an amendment to the Tax Expenditure Budget that would have eliminated the phrase from the state government’s lexicon, replacing it with the phrase, “tax freedoms.” (Downey is now the GOP state chairman.)
Kalambokidis doesn’t anticipate any unwanted fallout from that study or the other government studies she participated in over the years, because they are grounded in sound economics.
“My interest is in producing a relevant, accurate, useful forecast,” she says. “I want to provide information that is useful for making good public policy decisions and doing what is best for Minnesota. That is my interest.”
Hitting the road?
Perhaps it’s not her only interest. She might also one day help resurrect the fabled “Tom and Tom Show,” albeit in an all-female incarnation.
For at least the last decade of his run as state economist, Stinson frequently took to the road with State Demographer Tom Gillaspy doing tag-team public presentations demonstrating the critical nexus of economics and demographics in Minnesota’s future. They emphasized the state’s aging population and the increasing diversity of its workforce, and they strongly urged the state to prepare for the ramifications of those and many other inevitable changes.
Stinson hopes Kalambokidis and new State Demographer Susan Brower will pick up that mantle and work together, both privately and publicly, in similar fashion.
“Demographics are going to be an important part of macro-economic forecast, the state economic forecast and the revenue forecast for at least the next decade,” Stinson says. “There are a lot of big changes that are going to come about in revenue production that are going to be due to demographics.”
For example, he says, as baby boomers begin to reach the age of 70 years and six months, they will be required to start drawing down 401(k) and IRA savings accounts.
There are many implications for that, Stinson says, not least of which is a reduction in the savings rate among older Minnesotans.
“Having a good idea of what the demographics are will be essential for the revenue forecast,” he says.
Both Kalambokidis and Brower say they are interested in staging public forums after the fashion of the two Toms.
“I am certainly open to it,” Brower says. “I think we talked about it when she first came on the job, that this something we would like to do at some point. I guess we haven’t been invited to do it yet.”
Stinson, who served as state economist through 30 years and the terms of five governors, acknowledges that he had some pull in selecting Kalambokidis for her new job. He knew her work and her abilities well, having taught a class with her at the university for a number of years. He even pulled her in to sit through the process of his last economic forecast.
But he says that was not so much a case of grooming her for the job. There were not a lot of qualified candidates interested in taking on such a difficult job.
“I would say we were trying to make the job as appealing to her as possible,” Stinson laughs. “The bottom line with Laura is that we are lucky to have someone with her set of skills take the state economist’s position. And I am sure she is going to be really successful.”
The Kalambokidis File
Name: Laura Kalambokidis
Age: 49
Job: State Economist; professor Applied Economics at the University of Minnesota
Grew up in: Minneapolis
Lives in: Stillwater
Education: Washburn High School; B.S., economics, University of Minnesota; Ph.D., economics, University of Michigan
Family: Married to husband Nick for 26 years. Two children, a son in college, and a daughter in high school
Hobbies: “As a family we do a lot of outdoor stuff like biking and fishing and camping, running,” she says. “And I like to cook Indian food.”
Random relevant fact: Kalambokidis studied under Walter Heller, formerly President John Kennedy’s chairman of the Council of Economic Advisers. She also studied welfare economics under professor Edward Coen, the father of movie production partners Joel and Ethan Coen.
