Projected State Budget Surplus Hovers Near Record

(KNSI) – Minnesota Management and Budget has released a new outlook for the state’s finances over the next two years. Things haven’t changed much, even when factoring in inflation.

The balance has dropped by only $66 million from its November projection. The largest expenditure adjustment is for the rising cost of goods and services, eating into the balance to the tune of $1.423 billion. Mostly offsetting that, the current fiscal year is seeing more taxes come in than anticipated so the beginning balance for the 2024 biennium should be $865 million more than expected back in November. Individual and corporate taxes collected have been revised up for FY 24-25 as well.

MMB now believes a surplus will exist through at least 2027. Governor Tim Walz is hailing the report as a success, saying “Minnesota continues to have a record-low unemployment rate, one of the most diverse economies in the nation, and is on a path to be the best state in the country to raise a family. Our One Minnesota Budget and today’s forecast outline the historic opportunities we have to invest in education, children, health and safety while lowering costs, cutting taxes, and sending checks to Minnesotans across the state.”

House Minority Leader Lisa Demuth (R-Cold Spring) says inflation may not be affecting the public sector much but it is having a huge impact on family budgets. She says, “While inflation hasn’t hurt government tax revenue, it has significantly hurt Minnesotan’s buying power. It’s time to get serious about giving the surplus back to the taxpayers so they can afford their lives in the face of historic inflation driving up the cost of basic necessities. We are rolling out our tax cut plan tomorrow because we know it’s never too early to give the money back.”

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