Minnesota surplus up to $1.2 billion
ST. PAUL -- Minnesota's state budget surplus is growing.
A report released this morning shows the state has a $1.2 billion surplus, $408 million more than predicted in early December. Minnesota Management and Budget reports that revenues are up $366 million from December projections and spending is falling slightly.
A $2.6 billion surplus is predicted for 2016-2017.
The report opens the door to increased spending requests, deeper tax cuts and, perhaps, adding more to the state budget reserve during the legislative session that began Tuesday.
Details of the budget forecast, including predictions about the state's economy, were to be released later today.
A similar December budget and economy report, known as a budget forecast, showed the state with about a $1 billion surplus, which shrunk to $825 million after the state repaid schools money it had borrowed from them in recent years.
The forecast is important because it shows Gov. Mark Dayton and legislators how much money they have available this year.
In the third day of the legislative session, Thursday, the House Taxes Committee approved a bill sending $500 million back to businesses and middle-class Minnesotans, eating up a good portion of the surplus they thought they had at the time.
Before the forecast was released, Senate Majority Leader Tom Bakk, D-Cook, said he would wait to make decisions about spending, taxing and whether to add to the state's budget reserve until after the forecast. Bakk said he remembers the days during Gov. Jesse Ventura's administration when the state sent rebate checks to the public, with the state soon running into economic problems and running low on money.
Senators are not up for election this year, but all House districts are elected every two years and leaders of that chamber are eager to show their willingness to cut taxes this year after last year raising them more than $2 billion.
The Legislature and Dayton approved a $38 billion, two-year budget last year and only need to make minor changes this year.
Dayton planned to wait until after the forecast to announce plans to tweak the existing budget.
The governor and legislative leaders warn groups against asking for money this year, saying that even with a surplus the state cannot afford expanding the budget. However, groups ranging from those supporting expanding high-speed Internet service to those behind better long-term care are asking for money. Most groups say that funds could come from the surplus.
House Speaker Paul Thissen, D-Minneapolis, said before the forecast that he cannot support proposed transportation tax increases made by fellow Democrats. However, he added, funds could come from surplus money.
Bakk floated a plan to use surplus funds to increase spending on public works projects. He said, for instance, that the $100 million-plus needed to finish the state Capitol renovation project could come from cash, opening the regular public works funding bill for more projects.