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Minnesota Projects $1.5 Billion Budget Surplus

A forecast budget surplus will give Minnesota legislators and the incoming governor more room for new spending and/or tax cuts. A forecast budget surplus will give Minnesota legislators and the incoming governor more room for new spending and/or tax cuts. |  Photo: WDIO

From Associated Press reports
Updated: December 06, 2018 05:00 PM

ST. PAUL, Minn. (AP) - Minnesota officials are forecasting that the state will have a $1.5 billion surplus for the next two-year budget period.

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The forecast released Thursday by Minnesota Management and Budget sets the stage for the debate over taxes and spending in the 2019 legislative session. The surplus gives Gov.-elect Tim Walz and the Legislature more room for new spending initiatives, tax cuts or some combination of both.

The agency projects that the state will have $720 million to roll over into the next budget, and it predicts an additional $824 million surplus for the 2020-2021 budget for a total of $1.54 billion. And it says the state's budget reserve now totals $2 billion.

The agency says Minnesota's budget outlook remains sound despite slower growth expected through the period.

GOP officials are taking credit for the projected surplus. Republicans say they will consider more tax relief in light of the projected surplus.

Senate Majority Leader Paul Gazelka says the state does not need to increase taxes to fund Minnesotan's priorities in 2019. Gazelka says, "we should do more to make sure families can keep their hard-earned money."

House GOP Leader Kurt Daudt says the surplus "shows that the Republican approach of lowering taxes and restraining runaway spending works."

Meanwhile, Walz told reporters Thursday he credits fellow Democrat Dayton for the financial stability that has resulted in several successive surpluses during his tenure.

Walz gave few specifics about what he plans to do in terms of new spending or changing tax laws. He says his priorities will be education, health care and support for local communities.

Democrats will take over the Minnesota House when the session begins in January. Republicans will maintain their slim majority in the Senate.

Incoming House Speaker Melissa Hortman struck a cautious note, saying there is significant uncertainty in the forecast. She did not commit herself to increased spending, but said much of the money will be available only for one-time spending because growth is expected to slow in future years.

Credits

From Associated Press reports

Copyright 2018 The Associated Press. All rights reserved.

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