ST PAUL, Minn. — An optimistic forecast issued Tuesday projects a state budget surplus of more than $7.7 billion for Minnesota's 2022-23 biennium.
The November Budget and Economic Forecast says the state's economic outlook is significantly improved thanks to strong growth in income, consumer spending and corporate profits during 2021.
The improved budget forecast triggers an automatic statutory allocation to the state budget reserve, leaving the reserve balance at $2.656 billion.
“Today’s news is good for Minnesotans, and it makes one thing crystal clear: Our economy is strong," said Gov. Tim Walz. "Throughout this pandemic, we’ve made decisions to both save lives and protect our economy, and now, we have a remarkable chance to expand economic opportunity for all Minnesotans and move our state forward. It’s time to lower the costs of health care and child care, make it easier for parents to care for a newborn or sick family member, and help Minnesotans make ends meet.”
Republican lawmakers had a different take on the improved forecast, saying the money belongs not in a surplus but in the hands of taxpayers and small businesses. They claim Minnesota businesses are facing a tax hike of 15% or more later this month to address a $1B deficit in the state's unemployment insurance trust fund.
"While government is flush with cash, Minnesotans are still struggling with inflation at thirty-year highs, gas prices up 50% or more, and sticker shock on their energy bills," said House Minority Leader Kurt Daudt (R-Crown). "This record-setting surplus gives us a real opportunity to help make Minnesotans' lives more affordable and prevent Gov. Walz and Democrats from raising taxes on struggling businesses later this month."
"With inflation, increasing energy prices, and continued economic hardship, it’s more important than ever for us to partner together to make sure families have the resources they need to thrive," added Senate Majority Leader Jeremy Miller (R-Winona). "We can also provide our small businesses the economic support to grow and create good-paying jobs. The top priority of Senate Republicans this session will be to provide additional tax relief to Minnesotans across the state."
Despite today's rosy financial update, budget forecasters say economic uncertainty and the COVID pandemic continue to pose significant risk to the forecast. Still, the improved numbers will work into planning estimates for the 2024-25 fiscal year.