Billion-dollar surplus latest good economic news for Minnesota

Gov. Mark Dayton
MinnPost photo by James NordGov. Mark Dayton

The good economic news keeps on coming for Minnesota.

The office of Management and Budget today released its forecast (PDF) for the coming year, a forecast that shows a surplus of $1.08 billion — that’s billion — for the coming year.

The forecast means the state will be able to pay off all of its debts — the remaining $246 million owed to schools and $15 million owed to a state airports fund — and still have more than an $800 million surplus.

This is heady stuff for those who rememeber years of begging and borrowing as pols tried to cobble  together budgets that techinically were balanced.

The surplus, means, according to Jim Schowalter, who heads the MMB office, that Minnesota is “one of the leading states in the country in terms of economic performance.’’

Gov. Mark Dayton’s office released a statement taking credit for the positive budget news.

It also said that all of the jobs during the “great recession” have been recovered; that since August, Minnesota has gain 13,000 jobs and since January 2011 (when Dayton took office) the state has added 122,000 jobs.

All of this heart-warming news on a cold December day doesn’t mean there won’t be things to argue over.

Surely, this sets the stage for some of the taxes that the DFL Legislature and the governor sought in the last session to be rolled back.  Some of those taxes — such as a warehouse sales tax — have not even begun yet.

That warehouse tax, a favorite target of Republicans, is almost certain to be eliminated. There are some other business-to-business taxes, particularly relating to the ag industry, that likely will be chopped.

And likely, there still will be funds left over, likely in the neighborhood of a half-billion dollars.

Full details of the budget forecast are to be announced later this morning.

Following the MMB presentation, DFL and Republican legislative leaders are lining up to comment. Leaders of both parties, of course, will take credit for the surplus.

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Comments (6)

  1. Submitted by Wes Davey on 12/05/2013 - 11:23 am.

    Somehow, some way, the GOP legislators will spin this good economic news to either take credit for it, or downplay it altogether.

  2. Submitted by Jim Berry on 12/05/2013 - 12:08 pm.

    Budget Surplus?

    Let’s not jump into another ‘Jesse Moment’ and act as if this is in the Bank right now. It’s just on paper…and Projected. No rebate is warranted and new projections should be considered when repealing the Warehouse tax…it should be repealed, but how much of the future impact of that tax is already in this Projected Budget.
    On the other hand, it is Projected, so let’s not get overly excited about increasing Department Budgets quite yet.

    It does appear that having an honestly Balanced budget has had an affect on the State’s economy. A question to research for future considerations may be ‘Did the years of taking the State’s tobacco endowment (and recently the lawsuit payments the State receives from the National tobacco settlement for the next 20 years), money from Public School Districts, state airports fund, and other cash plundering for one time, stop gap type budget fixes, weaken the States overall economy prior to 2007-08 and also hinder the economic recovery of the State? All because the Majority in the Legislature of the time, did not wish to make the tough decisions.
    Good News…and I hope most if not all becomes a reality in the Bank.

  3. Submitted by john milton on 12/05/2013 - 01:09 pm.

    Minnesota’s surplus

    One might argue that Governor Dayton should not get ALL of the credit for the $1 billion surplus, but it is obvious to all but the most dimwitted Republicans that the reign of former Gov Pawlenty set Minnesota back in nearly every dimension: health care, K-12 and higher education, job growth, infrastructure, etc. Had Pawlenty been elected to a third term in 2010, the national shame that resulted from the election of Gov Walker in Wisconsin would have come to Minnesota. Thankfully, it wasn’t! And thankfully, the GOP controlled the Legislature for only two years.

  4. Submitted by Karen Sandness on 12/05/2013 - 02:09 pm.

    Let’s hope that Minnesota doesn’t make the same mistake

    that Oregon did.

    They have a state law commonly known as “the Kicker,” which requires a tax rebate every time the state budget goes a certain amount into surplus. It is very popular with voters, but only with voters who don’t think things through.

    When I lived there, I was earning about the median income for the state, and my Kicker refund was about $80. OK, I could splurge on something. Poor people received a smaller rebate, rich people a larger one, and corporations (those that even paid taxes) got a huge one. Everyone loved this–unless they were long-term thinkers.

    Of course, the state eventually went into deficit as the economy worsened, and the cupboard was bare. The Republican-dominated legislature would not hear of tax hikes, and an initiative process run amok forced mandatory minimum prison sentences, so the state government had to cut everything else to fund the prisons.

    Because of the decline of the timber industry, there was a lot of unemployment, so tax receipts remained low, and more cuts followed.

    Portland’s Channel 2 has a weekly program called Town Hall, in which the audience asks questions of people in the news. On one program that concerned school funding, a high school student got up and said that he could not remember a time when his suburban school did NOT announce annual budget cuts. There were forty students in his math class and not enough chairs, so that the last students who arrived had to sit on the floor, just for example. Students had to pay hefty sums to participate in any extra-curricular activity or else find community volunteers to take them over. The anti-tax activist featured on the show called him a “whiner.”

    Because nothing is more important than tax cuts, according to some people.

    While I like money as much as anyone, receiving a few dollars back is not worth endangering the state’s long-term fiscal health.

    • Submitted by Todd Hintz on 12/05/2013 - 03:50 pm.

      Refund

      I thought the same thing when Ventura enacted tax cuts and refunds. I got maybe a couple hundred bucks back, which wasn’t enough to change my life in even a minor way, let alone major. It would have been far better to hang onto the funds for a rainy day, which, of course, followed shortly thereafter.

      Sock it away or use it to retire some bonds early.

      • Submitted by Frank Phelan on 12/05/2013 - 10:10 pm.

        Planes, Trains and Automobiles

        Charlie Zelle is running around the state talking about how we’ve underfunded highways and transit and no we have a big backlog to address. What if we’d started to do that with Jesse’s refund checks?

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