SAINT PAUL, Minn. – Today, Minnesota Management and Budget (MMB) announced the November Economic Forecast, projecting a $641 million surplus for the current budget cycle, while a deficit of $1.273 billion is projected for the 2022-2023 biennium beginning July 1. The economic projections show that Minnesota is well positioned to provide immediate economic aid to workers and small businesses.
“In addition to COVID-19’s dire impact on Minnesotans’ health, workers, families, and small businesses are facing unprecedented economic pain. Our new budget forecast shows we’re in a position to deliver a relief package,” said Rep. Jen Schultz (DFL – Duluth). “The long-term budget forecast shows there continues to be uncertainty ahead, but right now, we have a responsibility to provide aid to those who need it the most.”
“It’s clear the pandemic has disproportionately impacted lower wage workers – those who were already struggling before COVID-19 – the worst. It’s time to pass an economic relief package to help those who have been hit hardest by this crisis,” said Rep Liz Olson (DFL – Duluth), the House Majority Whip. “We all care about one another in this state, and we want our neighbors and small businesses in our community to succeed. They are counting on us to deliver the support they need during this critical time, and House DFLers are committed to getting this done.”
The forecast notes the continuing economic challenges people are facing as a result of the COVID-19 pandemic, including 184,000 fewer jobs than in February. Lower wage workers have been impacted the hardest, experiencing a disproportionate number of job losses and longer durations of unemployment.
DFL lawmakers continue to work with Governor Walz and Republicans to reach agreement on a COVID-19 relief package. On November 24, House DFLers and Governor Walz announced a plan to help Minnesotans whose livelihoods and family businesses are most likely to be harmed by the pandemic.
The plan includes direct aid to small businesses, an eviction moratorium, a 13-week unemployment extension, and emergency $500 payments to struggling families. It also helps Minnesotans put food on the table with grants to restaurants to provide food for healthcare workers, homeless shelters, and long-term care facilities.
The forecast MMB announced today represents a significant turnaround from May’s interim budget outlook which projected a $2.426 billion deficit in the current biennium. Over the long term, the budget forecast remains “volatile and uncertain,” and economic recovery will depend on the path of the pandemic and the availability of a potential vaccine. Additionally, estimated expenditures aren’t adjusted for inflation in most areas of the budget forecast, adding as much as $1.3 billion to the deficit in the next biennium.
The 2021 legislative session beings January 5.