ST PAUL, Minn. — Minnesota budget officials are projecting a $1.3 billion surplus in the current two-year budget period thanks to an improving economic outlook.
Minnesota Management and Budget announced the forecast Thursday morning ahead of a more detailed presentation later in the day. Democratic Gov. Tim Walz and legislative leaders from both parties plan to comment on the outlook afterward.
The improved forecast helps set the stage for spending debates in the 2020 legislative session, which convenes Feb. 11. Tops on the session's agenda will be crafting a public works borrowing package, also known as a bonding bill. But lawmakers are bound to have ideas for what to do with the extra money.
The budget agency says a better-than-expected close to the last budget period, an improved revenue forecast, and a small decrease in estimated spending are contributing to the projected surplus. The stable outlook triggers an automatic allocation to the budget reserve account, bringing the reserve balance to its statutory target level of $2.359 billion.
“This budget forecast is good economic news for Minnesota. And the people of Minnesota have themselves to thank for that. For living here, raising their families here, and contributing to the state’s economy,” said Gov. Tim Walz, reacting to the news. “Minnesota’s economy is working because Minnesotans are working.”
House Minority Leader Kurt Daudt took a less positive spin on the surplus, saying it proves the money was there to reduce health care costs last session, something he says lawmakers should now do this session.
"Last session Democrats raised health care costs on Minnesotans by $900 million per year. This surplus is enough to fully repeal Democrats' harmful health care tax hike and lower health care costs. With our budget reserve fully-funded and revenues continuing to grow thanks to Republican-led tax cuts, we have an opportunity to reduce health care costs for Minnesotans by nearly a billion dollars."
While Minnesota’s economy and revenues continue to grow into the fiscal year 2022-23 planning estimates, budget challenges remain for that biennium.