ST. PAUL – State officials issued a new economic forecast for Minnesota 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. Shane Mekeland, R-Clear Lake, said the report signals state revenue continues to grow because this forecast factored for inflation for the first time in decades.
“For an apples-to-apples comparison, the current forecast would call for a surplus of approximately $19 billion using last November’s metrics,” Mekeland said. “Either way, it shows the state continues to over-collect from taxpayers at a massive rate. Our top priorities this session should start with returning these dollars to taxpayers, especially by completely ending the state tax on Social Security. We also need to make structural changes ensuring extreme over-collections of tax dollars don’t happen again. It is completely out of line for our state to have taken almost $18 billion more from taxpayers than it needs according to the current budget.
“It concerns me the governor and members of the legislative majority may see this surplus as a license to spend more and dramatically increase our state’s already unsustainable spending trajectory. We need to be going the other direction by actually becoming better stewards of these tax dollars and getting a handle on state spending.”
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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