Minnesota state government is facing a $5.27 billion budget deficit over the next 2 1/2 years, forcing difficult choices in the upcoming legislative session and maybe even sooner.

State leaders announced the deficit on Thursday at a news conference where they described the underlying economic conditions as the worst in 25 years and possibly dating to World War II.

"The economy, as is no secret to anyone, has body slammed our state budget," said Tom Hanson, commissioner of Minnesota Management and Budget.

The shortfall includes a $4.85 billion shortfall for the upcoming two-year budget cycle, plus a $426 million gap for the current budget that ends in June. In dollars, that's a bigger hole than the state has ever faced, but the 2003 deficit was a slightly bigger percentage of the state's general fund.

Hanson said Minnesota finds itself with plenty of company, with at least 41 states experiencing deficits. "We're lucky we're not California," he said, referring to that state's $11 billion shortfall.

State Economist Tom Stinson said the recession driving Minnesota's problem will be long and the worst since World War II, with a slow recovery expected.

"The bottom line - without getting into too many gory details - is this recession will be different," Stinson said, adding, "We have a significant problem looking out into the future. We are going to lose a lot of jobs."

Stinson said he expects another 58,000 loss in jobs in Minnesota between now and the end of the recession. And he warned it could still get worse, given problems in the housing sector and the aging population.