With state reserves already tapped out, legislators are bracing for an estimated $500 million to $1 billion in red ink when state budget officials release the November economic forecast Thursday.

The state's politicians have a lot riding on the forecast. Another large deficit could signal a savage rematch of the budget battle that engulfed the Capitol early this year and resulted in a record 20-day state government shutdown. The entire Legislature is up for election next year, so many legislators had hoped for a relatively quiet session starting in late January, letting them hit the campaign trail without baggage from a politically bruising budget fight.

"You'd have to put me in the pessimistic camp," said Deputy Senate Majority Leader Geoff Michel, R-Edina. "All of our members are very much aware of the economic situation and the probable need for us to be budgeters next session."

Elected leaders have just recovered from a six-month political fight to wipe out a $5 billion projected deficit. Legislators refused to accept Dayton's proposed income tax hikes and the governor would not cut spending as deeply as Republicans wanted. In the end, Dayton got the spending he wanted, but only after both sides agreed a mix of cuts, shifts and borrowing to square the budget.

This fall, Minnesota budget officials have been piecing together a particularly tricky financial portrait that accounts for the health of the local, national and world economy and then measures that against state expenses for the rest of the two-year budget cycle. The failure of the so-called supercommittee in Washington, the debt crisis in Europe and other potential global financial calamities could yank the state's slow economic recovery back into the ditch.

"One of the things that's different about this forecast is that there's a lot more upside potential and a lot of downside potential," said Tom Stinson, the state's economist. "There's just a lot of uncertainty."

Stinson said that it could blow a supersized hole in the state's economy if Congress and President Obama fail to renew payroll tax cuts and an extension in unemployment benefits. "That puts us perilously close to no growth and gives us no buffer" for such a shock, he said.