ST. PAUL – A new economic forecast for Minnesota projects a state record $7.7 billion budget surplus for the next two-year budget cycle, a $9 billion turnaround from one year ago.
Minnesota Management & Budget issued an updated state forecast Tuesday. It indicates “strong growth in income, consumer spending and corporate profits drove extraordinary revenue growth in FY 2021, and higher tax receipts to date in FY 2022 combine with an improved outlook for income, consumer spending and corporate profits to raise the revenue forecast for the current biennium.”
State Rep. Paul Anderson, R-Starbuck, said this presents an opportunity to provide Minnesotans with meaningful tax relief during the 2022 session.
“At the very least, this huge surplus should also take any discussion of tax increases off the table,” Anderson said. “Better yet, these surplus dollars present us with a good opportunity to provide relief to Minnesotans that already are facing higher prices on goods and services pretty much across the board. We owe it to the people of our state to return these excess tax collections to them.”
Anderson said the surplus dollars also should be used to spare Minnesota businesses from suffering a tax increase that is scheduled to hit them Dec. 15. Record-setting unemployment claims depleted Minnesota’s Unemployment Insurance Trust Fund, resulting in a debt of more than $1 billion to the federal government that is coming due.
“We should take care of the UI rate increase situation as soon as possible,” Anderson said. “Having workers off the job because of the pandemic should not be a burden shouldered by the many small businesses across the state. At least 40 other states have taken care of this using federal COVID dollars and we also should, particularly with the state experiencing an overabundance of revenue.”
The MMB report also indicates the improved budget forecast “triggers a statutory allocation to the budget reserve, leaving the reserve balance at $2.656 billion. While economic uncertainty and the pandemic pose significant risk to the forecast, the improved outlook carries into FY 2024-25 planning estimates.”
The $7.7 billion surplus follows a $1.3 billion shortfall projected in December of 2020 and a $1.6 billion surplus predicted last February.
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