MORE GOOD NEWS FOUND IN LATEST STATE BUDGET FORECAST
State economists recently briefed lawmakers on Minnesota’s fiscal situation, and once again, the news is good.
According to the February forecast, Minnesota’s budget outlook has improved by $323 million. This surplus is in addition to the $876 million surplus that was projected – and reallocated – from the November forecast.
Minnesota’s financial experts say more than two-thirds of the forecast gain came from a $230 million reduction in projected spending. Forecast revenues also increased by $93 million, including an increase of $71 million for income and sales taxes.
Again, Minnesota lawmakers will not be going on a wild spending spree with this $323 million surplus. Under current law, the first $5 million will be added to the budget reserve, bringing it to $653 million. The remaining $318 million will reduce the school aid shifts that have been enacted throughout past legislative sessions.
This is the second straight economic forecast that’s been significantly positive for Minnesota, following years of multi-billion dollar budget deficits. I’m not sure what negatives can be said about this news. Its clear Minnesota is now trending in the right economic direction.
In one year, we’ve taken a $5.1 billion deficit and changed into a nearly $1.2 billion surplus – a $6 billion turnaround. Unemployment is significantly lower than the national average. There’s no doubt the reforms we’ve enacted are working, and we must continue down this path to success.
It’s important to note that this legislative majority is not making needed changes solely for a two year cycle. The reforms we are implementing are designed to help us over the next ten to twenty years, putting Minnesota’s government in position to handle the ups and downs of the economy. Two straight positive forecasts are a trend, not a mirage, and I’m pleased Minnesota’s finances are back on track.