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. Harry Niska, R-Ramsey, said the report signals state revenue continues to grow because this forecast factored for inflation for the first time in decades.
“The DFL added inflation to the forecast try to keep growing government, and that ended up reducing projected revenue by almost $1.5 billion,” Niska said. “The state surplus stayed flat because Minnesotans are paying even more in taxes than the previous forecast, which means tax relief should continue to be our top priority for this session.
“It also is abundantly clear we need structural changes to provide fiscal balance in Minnesota, including a constitutional amendment to stop the endless growth of spending and over-taxation. I’m personally working on constitutional changes to limit spending and require taxpayer refunds so we can prevent the state from making these massive over-collections in the future.”
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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