ST. PAUL, Minn. (FOX 47) – Minnesota Management and Budget has announced a $1.5 billion surplus, heading into the 2020 and 2021 fiscal years.
While both Republicans and DFLers are pleased with the announcement, they are cautiously optimistic.
If inflation is taken into account, the projected balance for the next two years comes out to $382 million.
“If we have one-time revenue or one-time surplus, the answer to that isn’t permanent spending,” said House Speaker Kurt Daudt. “I think we have to continue to be fiscally prudent, continue to be responsible with the resources that tax-payers have given us.”
“Some of the concerns that I’ve always had is these do not factor in inflation,” said governor-elect Tim Walz. “They do not factor in some of the changes that come with a volatile economy, so at this point we’re still formulating.”
Plus, there’s no knowing what spending will look like in the future.
“It’s important to remember that the projected planning balance for 2022 and 2023 is $456 million. For those of you who have been here before, you will recall the concept that on-going spending in one biennium tends to grow a lot in the next biennium,” said Minnesota Management & Budget Commissioner Myron Frans.
But with the surplus, lawmakers at the state’s capitol say they can spend the money better education, more access to affordable healthcare, investments in transportation and infrastructure.
Republicans said the surplus means no tax increases at this time, and the state’s rainy day fund will get an “infusion” of $491 million.
According to the House DFL, economic growth is expected to slow down in future years.