Dear Neighbor,
Just some quick notes regarding the state's new economic forecast, which was released today:
The new forecast calls for a $900 million surplus through the 2016-17 biennium. That total is down $300 million from November, but it still is a sizable surplus and it provides the framework for the 2016 session.
Also, we should note the figure of $900 million is lower than the actual total since state law stipulated that one-third (around $600 million) be taken off the top and placed into reserve accounts. Those reserve accounts were drained to help make up for shortfalls around the time of the Great Recession, but have been replenished of late.
Our priorities should remain the same for the 2016 session despite this slight reduction in projected revenue. We should be working to provide Minnesotans with tax relief and to put additional funding toward improving our roads and bridges. Discipline will be important as we face key decisions regarding the surplus, especially with economic uncertainty in the future and external factors such as a weaker national economy that impact us in Minnesota.
I have mentioned in previous updates that our ag. industry faces significant economic challenges with low prices on commodities. That fact should be taken into account as we lay out plans during the upcoming session.
As always, your input is welcome as we consider action on these and other issues.
Sincerely,
Paul