Minnesotans received positive news about their state budget on Friday from the February budget forecast. Last December the state projected a surplus for the next two years (fiscal years 16-17) of $1.04 billion. The updated forecast now estimates a surplus of $1.87 million.
The $832 million in projected growth is largely due to a expected increases in income and sales tax revenue over the next two years. About $480 million of the projected FY 16-17 surplus is a carry forward balance from the budget that’s about to expire on June 30. View the forecast documents.
The improved economic news also extends into the “tails” of fiscal years 18-19. Friday’s forecast indicated that a structural balance of $3.18 billion in fiscal years 18-19.
Race is On
The race is now on between the Governor and legislative leaders on what to do with $1.9 billion in surplus revenue for the next budget cycle.
Governor Dayton will formally outline a supplemental budget plan on March 9. View his statement from last Friday outlining some of his key priorities for his supplemental budget request.
While he doesn’t call for adding money to the formula, he does want to fully fund a universal 4-year old preschool program. A college tuition freeze and funding for a new and improved child protection system are also included.
House GOP Speaker Kurt Daudt said they want to return half or $900 million of the surplus to taxpayers. In what form and manner they would do so remains to be seen, but there’s no shortage of tax cut bills in floating around the House.
The bidding war is on. The first policy deadline in three weeks away. March Madness has officially begun.