Minnesota Projecting Budget Surplus Again
ST. PAUL -- The latest budget forecast for Minnesota is projecting a surplus. The Minnesota Management and Budget Office says the state's economic outlook has improved a lot since May.
Higher general fund revenues and lower expected spending has resulted in a projected surplus of $641 million for the fiscal year that ends in June.
That's a substantial improvement from state's last budget forecast, which was released in May as the coronavirus pandemic was taking hold. At the time, Minnesota Management and Budget projected a $2.4 billion deficit in this budget cycle and a $4.7 billion shortfall in the next.
Minnesota Governor Tim Walz:
This improved economic outlook means we can, and we must, act immediately on COVID-19 relief. We must do everything we can to keep small businesses afloat and support the working families who are bearing the brunt of this crisis.
The improved budget outlook continues into the next biennium, but there is still a nearly $1.3 billion shortfall for 2022-2023.
Republican State Representative Lisa Demuth of Cold Spring:
“This forecast certainly is brighter than the dire outlook projected in recent months,” Demuth said. “Lower-than-expected Medical Assistance utilization and reduced public school enrollment linked to parents seeking other educational options for their children are major factors in reduced state spending. Furthermore, tax revenues were greater than expected, in large part because our economy has been rebounding and income tax revenue did not fall as sharply as earlier anticipated. This improved bottom line will be helpful as we continue working on delivering relief to Main Street businesses that have been disproportionately damaged by restrictions that have been placed upon them.”
This new positive number gives lawmakers and the governor a preliminary snapshot for when they set the new two-year state budget beginning in January, but also immediate information on how much money is available for a state assistance package lawmakers are working on for restaurants and bars closed by COVID. The governor says it's possible the legislature could act on it as soon as this week.
The budget office says as the pandemic continues challenges do persist including Minnesota has 184,000 fewer jobs than it did in February.