Minnesota Has Surplus, But Less Than Leaders Expected

Minnesota’s state budget has flipped from being in deficit to surplus, but the added money is less than legislative leaders expected.

Minnesota Management and Budget, the state finance agency, projects a $329 million surplus for the current $46 billion budget, which ends July 1, 2019. However, Minnesota legislative leaders told a Forum News Service forum two weeks ago that they expected a surplus of $600 million to $1 billion; Gov. Mark Dayton would not say how much of a surplus he expected.

The agency released the report Wednesday, Feb. 28. It provides the basis for any spending and tax legislation lawmakers and Dayton consider during the legislative session that ends May 21.

Late last year, a similar report showed a $188 million deficit. The Wednesday report updates the earlier one and folds in actions taken by the federal government, including a new income tax law.

The state agency reports that the forecast reflects improved U.S. economic growth, in part due to tax changes. However, it does not include any economic changes that could be coming in Minnesota state tax law.

Besides a better economy, the new report, known as a budget forecast, indicates Minnesota state spending will be $167 million lower than previous estimates. The most significant spending decrease is in the Children’s Health Insurance program, which the federal government has resumed funding.

More information will be released at mid-day.

Reaction began to flow in minutes after the surplus figure was announced.

“The state’s budget surplus should first and foremost be targeted towards under-funded county services that are both mandated and essential,” said Isanti County Commissioner Susan Morris, president of the Association of Minnesota Counties. “This includes continued funding for statewide transportation needs as well as additional resources to help counties verify eligibility for those seeking medical assistance.”