December 8, 2013

Projected State Budget Surplus

Minnesota’s rebounding economy has brought the state a $1.08 billion surplus for the remainder of the two year budget cycle, according to a new state economic forecast. That’s good news for state leaders, who had pinned their hopes on the state steadily pulling itself out of the worst financial downturn since the Great Depression. The first $246 million must be used to complete repayment of the K-12 school property tax recognition shift.  Additionally, $15 million will be transferred to the state airports fund, restoring money originally borrowed in 2008.  This forecast completes repayment of all accounting shifts from prior budget solutions. That leaves a bottom line surplus of $825 million, budget officials said. Minnesota Management and Budget Commissioner Jim Schowalter said the forecast highlights the state’s recovery compared to the rest of the nation. On the national level, economists are seeing slower growth than expected and more uncertainty caused by continued political budget and spending showdowns. Minnesota is “one of the leading states in the country in terms of economic performance,” Schowalter said.