Minnesota state budget update reveals $7.7 billion surplus
ST.PAUL, MN. (KBJR) - Minnesota state leaders gave an updated budget forecast Tuesday revealing a projected surplus of more than $7.7 billion.
State leaders are calling it “historic” and the best Minnesota has ever seen.
In Tuesday’s update, officials credited strong growth in income, consumer spending and corporate profits for the extraordinary revenue growth.
This surplus is a drastic change from the last budget update in February.
That was when an anticipated $1.3-billion pandemic deficit swung to a $1.6-billion surplus because of the improving economy.
When it comes to what to do with this huge surplus, Minnesota republicans and democrats are already at odds.
Republicans are calling for corporate tax cuts to combat rising costs and inflation.
Meanwhile, Democrats see this as an opportunity to invest in things like social security, education and affordable health care.
Governor Tim Walz said this is a win for the state of Minnesota as it continues to recover from the economic damage caused by the pandemic.
“This is what responsible policies look like. This is what happens when you invest in people, and I will say it again, the false analogy that you need to choose between protecting and lowering the death rates among your citizens and protecting your economy has now been proven that that was a fallacy,” said Gov. Walz.
This projected growth will also be used to fully replenish the state’s “rainy day fund,” which was drained back in 2010 and used for other emergencies over the course of the pandemic.
There are also a number of risks still involved with this projection.
State economists said these numbers are dependent on things like inflation and supply chain issues leveling out over the next two years, and the pandemic starting to subside as well.
Northland lawmakers are also speaking out about what they would like to be done with the money.
“Today’s budget forecast is encouraging news at a time when too many Minnesotans are still struggling. This coming session, the Legislature should focus on helping working Minnesotans and those experiencing hardship, not handouts to the wealthy and large corporations. The COVID-19 pandemic isn’t over, and our health care system continues to face tremendous pressure while Minnesotans’ health still remains at risk,” said Rep. Jennifer Schultz (DFL), who represents District 7A. “We also must note inflation isn’t accounted for in the forecast, and one-time money represents a sizable portion of the surplus. Still, lawmakers have an incredible opportunity to deliver the resources workers, students, and families are counting on to recover and keep our state moving in the right direction.”
“This budget surplus shows that our government is taking way too much money from the pockets of Minnesotans,” said Sen. Justin Eichorn. “We need to give taxpayers their money back. With rising costs and inflation, let’s give Minnesotans the relief they’ve earned. This includes prioritizing my bill to eliminate the unfair Social Security tax and looking at ways to create a tax climate that better supports Minnesota job creation.”
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