Minnesota officials said that the state budget reserve is now officially at $811 million, following a change in state law that takes effect today.
The so-called “rainy day fund” is now at the highest point in state history; it’s limit hadn’t been raised since 2001.
The reserve is intended to help the state weather any economic downturns, akin to keeping a healthy reserve in the family checkbook. Language in the law calls for one-third of the state’s projected budget surplus to go to the reserve, allowing it to grow in the future.
Minnesota Management & Budget Commissioner Jim Schowalter said:
“This action is a substantial step towards additional budget stability and prudent financial management for the state. Increasing the budget reserve helps the state manage economic risk and is viewed positively by the state’s bond rating agencies.”
Gov. Mark Dayton, who is running for re-election, (as is the entire state House) used the budget reserve increase to laud how he and the DFL Legislature handled recent sessions:
“Minnesota has finally turned the corner on a decade of deficits that shortchanged our students and stymied needed progress for our state. We turned a $6.2 billion deficit into a surplus, repaid all the $2.8 billion previously borrowed from our schools, made important new investments in education and job creation, and increased the reserve to its highest level in history. I thank this legislature for its responsible fiscal management; and I thank the people of Minnesota, whose hard work has fueled our state’s strong and continued economic growth.”