ST PAUL, Minn — An updated forecast released Monday puts Minnesota's budget surplus at $17.5 billion, representing an overall improvement in the state's fiscal picture.
While the figure from Minnesota Management and Budget is down slightly from the $17.6 billion that the agency projected in November, the forecast now factors in the impacts of inflation on state spending for the first time in 20 years.
The new figure also accounts for a little over $100 million that the Legislature already has spent since it convened last month, mostly on bringing the state tax code into conformity with federal regulations and deductions, which resulted in a tax cut for many residents.
Projections also reflect how tax revenues continue to run ahead of expectations. Minnesota Management and Budget said individual income and corporate tax revenues are both up.
“This is great news for Minnesota and a sign that our economy is strong and growing,” said Governor Walz. “Minnesota continues to have a record-low unemployment rate, one of the most diverse economies in the nation, and is on a path to be the best state in the country to raise a family."
The new projection is the forecast that the Minnesota Legislature will use to set the next two-year budget, which takes effect in July. By law, it must be balanced.
But it means there's still money for priorities laid out by Democrats, who control both chambers of the Legislature and the governor's office for the first time in eight years. Republicans are still pushing for tax cuts.
"Our One Minnesota Budget and today’s forecast outline the historic opportunities we have to invest in education, children, health and safety while lowering costs, cutting taxes, and sending checks to Minnesotans across the state," Walz vowed. "I look forward to continuing this growth and ensuring every Minnesotan benefits from our thriving economy.”
The governor's proposed budget includes a combination of spending increases and tax credits to return some of the surplus to taxpayers.
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