ST. PAUL – Minnesota Management & Budget on Tuesday issued a budget forecast which calls for a $641 million state revenue surplus through June 30, reversing a previously projected $2.4 billion shortfall. A $1.3 billion shortfall for the 2022-23 biennium also marks a significant improvement from earlier predictions.
“This is good news, a dramatic turnaround despite slowdowns and heavy restrictions that have been placed on our businesses in the last several months,” said Rep. Paul Anderson, R-Starbuck. “The state ended up spending less and did not experience the sharp reduction in income-tax revenue that previously was projected, mitigating the downturn.”
Anderson said a $919 million drop in Health and Human Services spending, resulting from lower-than-expected Medical Assistance utilization, was a key factor. He also said a $118 million reduction in E-12 education spending occurred as many parents sought alternative educational options for their children or delayed sending them to kindergarten.
“This improved economic outlook will be helpful as the Legislature works to set a new two-year state budget during the 2021 legislative session starting in January. “While we still need to take a cautious approach because of the economic volatility and uncertainty which remain, I hope we are soon able to approve a package of relief for the small businesses and workers who have suffered great losses in recent months.”
While this forecast provides a rough framework of figures, an updated February report will set the official numbers from which the Legislature will construct a new state budget.
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