Minnesota Budget Update Reflects $7.7 Billion Surplus

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ST. PAUL, Minn. (WCCO/AP) — Minnesota officials are releasing an updated budget forecast on Tuesday showing further improvements and setting the stage for the 2022 legislative session, to the tune of a $7.746 billion surplus.

The Minnesota Department of Management and Budget said Tuesday morning that “strong growth in income, consumer spending and corporate profits drove extraordinary revenue growth.”

The forecast will trigger a statutory allocation to the budget reserve, leaving that balance now at $2.656 billion.

WEB EXTRA: Read the full budget forecast, or download the forecast presentation’s main points (.PDF).

This is the first major revenue-and-spending forecast since projections from budget department in February, when an anticipated a $1.3 billion deficit due to the pandemic swung to a $1.6 billion surplus due to a rapidly improving economy.

Gov. Tim Walz did not give a new surplus figure when he spoke to the Association of Minnesota Counties on Monday, but said the new numbers are “the best they’ve ever been.”

Tax revenues since the last forecast have been running even higher than expected. The new forecast will also provide a view on what’s been happening with state spending during the current two-year budget period, which began in July.

Minnesota Management and Budget says the new projections don’t include more than $1 billion in yet-to-be-spent federal COVID-19 relief, but that money is bound to be part of the debate when lawmakers reconvene.

Republicans are already saying there’s enough money with the anticipated surplus to avert a tax increase on businesses that’s due to take effect next month to cover the state’s unemployment insurance debts.

“While government is flush with cash, Minnesotans are still struggling with inflation at thirty-year highs, gas prices up 50% or more, and sticker shock on their energy bills,” House Minority Leader Kurt Daudt (R-Crown) said. “This record-setting surplus gives us a real opportunity to help make Minnesotans’ lives more affordable and prevent Gov. Walz and Democrats from raising taxes on struggling businesses later this month.”

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