Just four months ago, experts projected Minnesota would face a $188-million budget deficit. Estimations released Wednesday now project a surplus for the next four years.
"Those projected surpluses are modest. $329-million in this biennium, (2018-'19) and $251-million in the next (2020-'21)", said Governor Mark Dayton.
Now state leaders will be tasked with figuring out what the best way to use the surplus will be.
Several things are on the state's radar, including tax conformity, a fix for the Minnesota Licensing and Registration System, a bonding bill, and school safety.
On Wednesday, Governor Dayton declined to discuss exactly how he would prioritize those needs.
"Those are all important. But again, we have very limited surplus here for this biennium, and even more so for the next biennium. And, I'm going to have to look very carefully, the legislature is going to have to look very closely at what's fiscally responsible to do," said Dayton.
House Speaker Kurt Daudt says the $500-million dollar swing from the November forecast is one of the largest turn around in modern history. He attributes it to tax relief at both the state and federal level.
"Republicans put more money back in Minnesotans pockets, and the state has benefited from that. So, it's a win-win," said Daudt, R - Crown.
But Speaker Daudt believes the forecast to be somewhat pessimistic.
"I think it could be even more optimistic, based on the kind of growth that we're seeing. I wish that it was, but what great news that we've had this turn around," said Daudt.
Governor Dayton, and other state agencies will now spend the coming days refining their tax and spending estimates, with a supplemental budget request expected from the governor expected in two weeks.
An economic consultant for the state predicts that the temporary boost to the national economy due to governments tax cut, and a spending increase could lead to a bleaker forecast in coming years.
Some Northland lawmakers weighed in on the forecast.
Democratic Senator Erik Simonson issued the following statement:
“The fiscal health of our state is stronger than when I was first elected to the legislature in 2012, but I do not take our good fortune for granted,” said Sen. Simonson. “The long-term impact of federal tax reform remains to be seen, so I am hesitant to read too much into this single snapshot of our state budget. I have always made it a priority to be a good steward of public dollars, and this year is no different. To my fellow lawmakers, I caution all of us to think long and hard about the impact our budget decisions will have on current and future generations. We have an obligation to provide for the common good and make sure we’re taking care of people who can’t care for themselves."
Democratic Representative Jennifer Schultz issued the following statement:
“While a budget surplus is certainly better than the alternative, our economic picture gives us reason to be very cautious moving forward. Last session, Republicans passed massive tax giveaways for the wealthy and special interests like big tobacco instead of making greater investments in what we all value. Yesterday, U.S. News & World Report ranked us the second best state in the nation. If we continue down the Republican path, Minnesota could soon start slipping.
“Looking ahead, if we’re to deliver a world class education, affordable and accessible health care, modern transportation infrastructure and so many other items Minnesotans deserve, we must start budgeting honestly and responsibly. Additionally, with continued federal uncertainty, our situation should be seen as tenuous at best. This means rethinking unnecessary corporate tax breaks so we can put ourselves in a position to make the necessary investments in what really matters: our people.”