J.P. Morgan revised its prediction for a recession to 60% for this year. That uncertainty casts a new, darker shadow over the state budget forecasts which were predicted to have a future $6 billion budget deficit.

This is a year legislators and the governor will have to agree on a balanced budget by the end of the legislative session on May 19 or face the prospect of costly special sessions.

If no agreement is reached by July 1, there would be a state government shutdown.

Minnesota currently receives $23 billion in federal aid per year accounting for 35% of the state's revenue.

Just this weekend, the U.S. Senate passed a GOP budget bill, which could mean $1.5 billion in annual federal Medicaid cuts for Minnesota.

Also this weekend, thousands gathered at the State Capitol to protest President Trump's policies including the new tariffs and cuts. Millions across the country held similar protests.

"People are worried about it. They are talking about it. And it's what keeps me up at night. We have to think about three things at one time. We have to balance this budget based on the forecast that we got in March, which is what we proposed," said Senate Majority Leader Erin Murphy. "We have to bring those bills through and get it done by May 19. We are also seeing the beginning impacts of tariffs and weakening markets for farmers, people laid off from their jobs."

All the state budget proposals contain major cuts. 

The governor is proposing $5.5 billion in cuts, the DFL Senate is proposing $5.2 billion, and DFL and GOP leaders in the House are proposing $3.7 billion. All those numbers factor in inflation.

"We can't do anything but look at ways to right-size government," said Republican House Speaker Lisa Demuth.

Just this past week, Gov. Tim Walz told all state agencies to assume any federal money they are expecting will get cut.

We recently saw the first of what may be an avalanche of layoffs at the state level with the Minnesota Department of Health  laying off 170 employees. Another 300 MDH workers got notices they could be next.

While a judge later blocked the MDH cuts, it's not clear if that means employees will get their jobs back. 

You can watch WCCO Sunday Morning with Esme Murphy and Adam Del Rosso every Sunday at 6 a.m. and 10:30 a.m.