St. Paul, Minnesota — Today the Office of Minnesota Management and Budget announced a forecasted state budget surplus of $1.871 billion for fiscal years 2016-17, but an available balance of $1.206 billion. Rep. Clark Johnson said that the forecast is good news, but that too many ordinary Minnesotans haven’t felt the economic recovery.
“This surplus is the result of hard work of everyday Minnesotans growing Minnesota’s economy,” said Rep. Clark Johnson (DFL – North Mankato). “Now is the time to be responsible. And invest in what makes Minnesota a great state to live in and gives our businesses a competitive advantage-our people. But we also need an economy that works for everyday Minnesotans, not just the wealthy few.”
A 2014 law passed by the DFL legislature and Governor Mark Dayton requires that one third of the surplus be allocated towards the state’s budget reserves. A 2015 law requires that budgets shifts from the two year state budget must be repaid with the surplus. Those repayments and allocations total $665 million which leaves an available balance of $1.206 billion.
“I am pleased a large portion of the surplus will be allocated towards the budget reserves to build our rainy day fund,” said Rep. Johnson. “I ran for office in part because we had years of unstable budgets and we had borrowed from our schools to pay off budget deficits. We need a stable budget that invests in the future of Minnesota.”
The forecast revealed that Minnesota’s economy continues to strengthen, even as confidence in the economy weakens. This lack of confidence can be attributed to a strong US dollar internationally, weakening markets for US iron ore and steel. Prices for Minnesota agricultural products also remain low, blunted by record harvests in 2015. Minnesota’s unemployment rate is down to 3.7 percent, but unemployment remains higher in Northern Minnesota’s Iron Range and in Minnesota’s communities of color.
Rep. Johnson said his main focus in 2016 will be priorities to expand incomes and grow economic opportunity for middle class families, citing the lackluster results from the 2015 session. The Republican-led House insisted on a budget that increased property taxes on Minnesota homeowners, raised tuition on college students, and increased health care costs for low-income working Minnesotans. Meanwhile, they pursued massive tax cuts for the largest property owners in the state.
“Although the state’s budget is improving, many families across Minnesota are not feeling the recovery,” said Rep. Johnson. “College students are seeing rising tuition, property taxes are rising. And working families are seeing their healthcare cost rise because of the cuts to MinnesotaCare. We have a lot to do to make sure this economy works for every Minnesota family."
The next economic forecast will be in late February 2016. The 2016 Legislative Session begins on March 8th. Rep. Johnson said the focus of the next session will be to pass a robust bonding bill to create jobs in every corner of the state, make long-term investments in transportation, and to help local communities stop property tax increases on middle-class homeowners, farmers, and small businesses.