Minnesota’s surplus climbs to $1.2 billion

MinnPost file photo by Terry Gydesen

Forget the cold. Minnesota’s economic forecast is warm and sunny with ever-more money pouring into the state’s coffers.

The latest forecast — the one used by the governor and legislators as the basis for many of their decisions — predicts that the state will have $408 million more than reported in the glowing November report.

Combined with the more than $800 million forecast in November, the state’s estimated surplus now stands at $1.2 billion more than was expected a year ago, when the current budget was being fashioned.

The state’s office of Management and Budget says the forecast is based on two major factors: Projected revenues are $366 million higher than just a few months ago, and spending is down $48 million.

Going forward, the projections are even rosier. The “structural balance” for the 2016-17 budget cycle is estimated at nearly $2.6 billion.

Of course, both Republicns and DFLers will claim credit for the turn-around.

And legislators in both parties will be pushing for tax cuts, although House members are working on their package much faster than their Senate counterparts.

On Thursday the House Tax Committee passed a list of tax cuts, with both middle-class families and businesses benefiting from proposals totaling $514 million.

The new forecast makes it all but a certainty that last session’s controversial business-to-business taxes will be eliminated in the next few weeks.

The repeal of those taxes — for everything from warehouse storage to commercial- and farm-equipment repair — will amount to $314 million, according to Rep. Ann Lenczewski, DFL-Bloomington, chair of the House tax committee.

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Comments (5)

  1. Submitted by Todd Hintz on 02/28/2014 - 11:18 am.

    Save It

    Save at least some of the money in a rainy day fund. Don’t pull a Ventura and blow it all. Things are rosy now, but as history has taught us that won’t always be the case.

  2. Submitted by Gail O'Hare on 02/28/2014 - 11:19 am.

    Will we never learn?

    When we had all those surpluses in the heady days of the dot com boom, Governor Jesse gave repeated refunds and Legislators fell all over themselves helping him do it. Only brave Roger Moe stood up and said, “Hey, folks, what about rainy days?”

    Since then, we cut back and cut back till the Minnesota dream is a distant memory, but now even Democrats are rushing to empty the piggy bank. Why don’t we rebuild what we’ve razed? This is boneheaded and foolhardy.

  3. Submitted by Mike Downing on 02/28/2014 - 11:23 am.

    Remind me why there was a need to increase taxes?

    Why did the DFL increase taxes in the 2013 Session when we have such a large surplus?

    • Submitted by John Roach on 02/28/2014 - 04:28 pm.

      The forecast in 2012 indicated a $1 billion deficit

      …for the 2014-15 biennium. The projected surplus is also a forecast, so while giving some back this session is appropriate, it would be irresponsible to assume it is 100 percent accurate. It will continue to change.

  4. Submitted by Kathi Malone on 03/01/2014 - 08:14 am.

    Kudos to our governor and legislature

    Just shows what a Democratic Legislature can do. Eat your heart out Scott Walker.

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