ST. PAUL – State officials issued a new economic forecast for Minnesota on Monday, projecting a $17.5 billion surplus for the new biennium.
The bottom-line surplus figure remains in line with the last full forecast, issued in early December. State Rep. Paul Anderson, R-Starbuck, said the report signals state revenue continues to grow because this forecast factored for inflation for the first time in decades.
“The surplus has actually grown from the November forecast but, with many economic indicators showing a general slowdown of the economy, we need to proceed with caution regarding adding ongoing spending that becomes part of the base budget,” Anderson said. “It also underscores the fact that we need meaningful tax relief. Eliminating the state tax on Social Security benefits and a lowering of the individual tax rates are just a couple of proposals that warrant serious consideration this session. Let’s also keep in mind long-term impacts of legislation approved by the majority this year could prove costly for our businesses, so anything we could do to mitigate their damage would be helpful to our workforce.”
Just hours after receiving the updated economic forecast, House Republicans on Monday sought to fast-track legislation fully eliminating the state tax on Social Security, a move which House Democrats blocked in a floor vote.
Overall, revenue tabulations for the current forecast continued to surpass previous projections for individual income taxes ($565 million) and corporate taxes ($125 million). Sales taxes were down $26 million.
The new $17.5 billion surplus figure will serve as the official framework as the Legislature works to establish a new two-year state budget this session before adjourning in late May.
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