Minnesota projects $1.5 billion budget surplus for new governor
Minnesotas economy is humming and is expected to generate a $1.54 billion state budget surplus, providing a financial launchpad for incoming Gov. Tim Walz.
The states economic forecast Thursday puts Walz, a Democrat, in a strong position to start working on some of his campaign vows, including boosting educational spending, expanding publicly funded health care and new money for transportation.
This is the final projection of state revenue and expenditures during DFL Gov. Mark Daytons time in office. Thursdays surplus starkly contrasted with the $6.2 billion budget deficit Dayton faced when he took office in Jan. 2011.
Minnesotas budget and economic outlook remains sound, despite slower growth through the budget horizon, according to a release from Minnesota Management and Budget.
While the states short-term financial outlook is strong, the sustained economic expansion that has contributed to a string of surpluses is projected to slow in 2022 and 2023.
That could temper what ends up in the budget for 2020 and 2021, which Walz and state legislators will be drawing up over this winter and spring. Walz must release his initial two-year budget proposal in February. It is expected to be around $50 billion.
The states economist and budget officials release forecasts twice a year. This projection is $1.2 billion higher than the previous forecast in February. Republicans, who have been in the majority in both the state House and Senate for the past two years, previously credited work on state tax cuts and last years federal tax changes with contributing to the $329 million February surplus.
Nine out of the past 10 forecasts have been surpluses, Minnesota Management and Budget Commissioner Myron Frans has noted, but to sustain that the next administration will have to carefully weigh the future costs of spending priorities.
Under state statute, $491 million of the surplus will be added to the states budget reserve, often referred to as the rainy-day fund, which now totals more than $2 billion, according to the state budget office.
Jessie Van Berkel 651-925-5044