Hello from St. Paul,
State lawmakers now have a new item on their to-do list this session: determining how to deal with a projected $3.7 billion surplus that exists for the remainder of this biennium. But there’s one problem: a projected $1.5 billion budget deficit for the next budget cycle will await state lawmakers when they return to the Capitol in January.
Last session Minnesota was looking at a nearly $20 billion budget surplus. By May, that $20 billion was spent, an additional $10 billion in taxes were raised, and state government spending had increased by 40%. This is four times the increase that you’d see in an average budget year.
With that in mind, the prudent decision would be to conserve the projected $3.7 billion surplus. The spending binge last session already has created more state employee positions than we can fill. State government shouldn’t be doing more while we try to fix what was passed last session.
Just last week we fixed a tax law from last session that had a $350+ million error. Everything last session was so rushed there is certain to be gaping holes in other legislation that will have to be addressed.
While the forecast says we have a $3.7 billion surplus, it assumes spending on the next budget will be reduced by 6%, which simply isn’t going to happen. Even with that false assumption, spending will outpace tax revenues.
Decisions made last session were clearly irresponsible and Minnesotans cannot afford extreme government spending sprees. It is not sustainable. We should be responsible with this forecasted surplus because it is just a forecast after all.
Have a good weekend,
Nolan
P.S. Sorry, no baby picture this week!