Budget forecast for Minnesota shows $1.5 billion surplus

“If anything we need to invest back in Minnesotans and let them keep some of their hard-earned money."

Edgar Linares
December 06, 2018 - 8:39 pm

by Susie Jones

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Associated Press & WCCO Radio -- Lawmakers in Minnesota are cheering after officials forecasted a $1.5 billion surplus for the next two-year budget period.

The forecast released by Minnesota Management and Budget on Thursday sets the stage for the debate over taxes and spending in the 2019 legislative session.

“The projected balance of $1.5 billion for fiscal years 20, 21 has grown because of increasing revenues, and decreasing expenditures,” said Commissioner Myron Frans.

The agency projects 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. The state's budget reserve now totals $2 billion.

The surplus gives Governor-elect Tim Walz and the Legislature more room for new spending initiatives, tax cuts or some combination of both.

On Thursday, Walz told reporters he was going to continue Gov. Mark Dayton’s legacy that maintains fiscal responsibility while protecting the reserve fund. He was asked if he still plans to raise the gas tax to fund transportation.

“I think it’s irresponsible anytime to look at something without understanding what we’re trying to get to, how we’re trying to build that and continue to assess where that’ll be,” said Walz.

Walz will release his budget outline on February 19. In the Meantime, Republican legislative leaders say there is no need to raise taxes with Minnesota looking at a surplus.

“If anything we need to invest back in Minnesotans and let them keep some of their hard-earned money that has helped be the fuel in this economy,” said Republican House Speaker Kurt Daudt. “That’s what’s going to help us maintain a strong state budget and strong revenue into the future.”

Senate Majority Leader Paul Gazelka said the state does not need to increase taxes to fund Minnesotan's priorities in 2019.