ST. PAUL – When Minnesota lawmakers return to the State Capitol in March, they will still have a state budget surplus to allocate. It just won't be as large as they may have expected.
On February 26, state economists projected our state to have a $900 million windfall, down from the previous November projection of $1.2 billion. State Representative Tony Cornish (R-Vernon Center) said this is exactly the reason lawmakers should always hold back on state spending even in what appears to be strong financial times.
"For months we've heard nothing but economic growth reports, and now that the official forecast has been revealed, our surplus has been cut by roughly one-fourth," Cornish said. "Even though the news is still positive, it does show how quickly things can change economically and why it's important to always use caution when expanding state government."
According to the economic experts, most of the surplus decline is due to a weaker federal economic outlook and lower consumer spending. Cornish noted that wage growth projections are also lower.
Because of this, Cornish sees two realistic ways to utilize this surplus before session ends: providing tax relief to those who need it in order to increase consumer spending, or spending some on one-time funding projects like roads and bridges.
"Since November, we've had people swarming the Capitol with their hands out asking us for an expanded budget for their program," Cornish said. "If we increase permanent spending now, that just means we'll have to go back and cut those programs later if and when a deficit returns. Instead, we should put some money back in the pockets of hardworking taxpayers and look to improve some roads and bridges in Greater Minnesota."