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.