Forecast shows $1.5 billion state budget surplus
Minnesota Management and Budget (MMB) released the November budget and economic forecast today, which projects a $1.54 billion surplus available for the next two-year budget cycle (Fiscal Year 2020-21). The surplus is the result of $720 million rolled over from the current biennium, along with an $824 million surplus expected in the next biennium. In addition to the available surplus is $350 million that is statutorily dedicated to the state’s rainy day fund, which will now top $2 billion for the first time. The economic forecast does anticipate economic growth to slow and a budget surplus in FY2022-23 of $456 million.
In his response to the budget forecast, Governor-elect Tim Walz prioritized education, health care and investments in communities. DFL legislators, led by House Speaker-designate Melissa Hortman, urged caution and said because inflation is not fully accounted for in the forecast, the coming budget surplus is closer to $350 million.
In their response, Republican legislators argued that the projected surplus should eliminate any discussion of tax increases, particularly a gas tax increase.
This forecast will serve as the basis for Governor-elect Walz’s budget proposal in February, but will be updated in March as legislators begin to craft appropriation bills. You can find the full details of the budget and economic forecast on MMB’s website.