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. Ben Davis, R-Mission Township, said the report signals state revenue continues to grow because this forecast factored for inflation for the first time in decades.
“The fact the surplus remained steady despite now factoring for inflation says it all about how much we need to bring some fiscal balance to our state,” Davis said. “Minnesotans are having to stretch their dollars to deal with historic price increases, yet our state continues to over-collect taxes from people at an unprecedented rate. Those two things just don’t jive and it needs to change – now.
“Our solution should be twofold: First, we need to provide meaningful tax relief to get these tax dollars back in the hands of Minnesotans who have been over-charged – starting with fully eliminating the state tax on Social Security. In addition, we need a multi-pronged approach with legislation preventing the state from accumulating such absurd surpluses in the first place. Those should be our main priorities from now through the end of this session. It’s time for the House majority to stop focusing on its never-ending list of divisive proposals catering to special interests and start working to help all Minnesotans live and work more comfortably in our state.”
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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