Latest Minnesota budget forecast shows $17.6B surplus
Minnesota’s latest budget and economic forecast was announced Tuesday morning, showing a massive $17.6 billion surplus for the state. This projection is up from the forecast $9.253 billion surplus back in February.
Minnesota Management and Budget said in an initial statement on its website that “strong collections and lower-than-projected spending” are contributing to the surplus in the current two-year budget period, which runs through June.
The agency also said it expects that economic headwinds and lower expected growth for the next two-year budget period, which begins in July, will be balanced by a large leftover surplus and healthy net revenues.
Control of the Legislature was split between the Senate Republican and House Democratic majorities for the last four years. But Democrats flipped the Senate in the November election and will take full control of state government for the first time in eight years when the 2023 Legislature convenes on Jan. 3.
After a deal for how to use some of the massive projected surplus fell apart at the end of this year’s legislative session and the DFL now set to control both chambers of the Minnesota Legislature and the governor’s office, Gov. Tim Walz and DFL leaders will have greater say over how to potentially use the surplus. In the past, Walz has said he’s supported sending checks to each taxpayer while Republicans had pushed for permanent tax cuts.
Democratic Gov. Tim Walz has been indicating that he’d prefer to use most of the surplus for one-time spending and tax relief, and that he’d like to revive his proposal for one-time income tax rebates. The new Democratic majorities in the House and Senate are developing their own ideas, but leaders have indicated education, child care and paid family medical leave will be priorities.