ST PAUL, Minn — The Minnesota legislature will have nearly a billion dollars more than previously expected when its next session begins.
Minnesota's 2022-23 fiscal year biennium ended with a balance of $820 million higher than expected at the end of the previous legislative session.
The surplus comes from a combination of taxes, accounting adjustments, and other revenue sources, which were $739 million more than expected and general fund spending, which was $81 million less than expected.
The $820 million figure will be added to the state's projected surplus for fiscal year 2024-25, which was estimated to be $1.583 billion when enacted in May. The combined surplus is now slightly more than $2.4 billion.
That's just a small fraction of the current budget of $72 billion, but it means lawmakers will return to St. Paul in February with more money to spend on government programs, cutting taxes or leaving in the bank than they originally expected. And the numbers could change by the time a new economic forecast comes out in February, which will provide the figures that count.
The state had a record $17.5 billion surplus as of last February's forecast. The Democratic-controlled Legislature used that money for a combination of spending increases, one-time projects and tax cuts when it set the current budget, which took effect in July.
Minnesota Senate Majority Leader Kari Dziedzic celebrated the news of the additional surplus funds in a Thursday statement.
"Minnesota is fortunate to have a diverse and thriving economy, and the latest budget report is a strong sign that many of our businesses and workers are doing well. However, with so much uncertainty in the U.S. House of Representatives and its ability to pass a budget, and conflicts across the world, we know that our budget picture can change," Dziedzic said in a statement. "Minnesota benefits from having functional legislature that has enacted a balanced long-term budget that prioritizes building an economy that works for everyone. In the coming months, we will continue to listen to Minnesotans as we develop our budget priorities for next year.”
Republican legislative leaders said the growth in the surplus shows that taxes are too high and that the money should go for tax relief.
Minnesota House Minority Leader Lisa Demuth lambasted Democrats for spending decisions in the last legislative session.
“This last session, Democrats blew through the record $17.5 billion surplus, increasing the state budget by 40 percent while failing to deliver on their campaign promises like fully eliminating the tax on Social Security and $2,000 rebate checks. Given this last year’s irresponsible spending spree, tax relief should be the only option on the table for any additional surplus,” said Demuth in a statement.
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