I hope this holiday season finds you well and enjoying time with friends and family.
Legislative work continues in advance of the 2016 session which begins March 8. While 2016 is not a formal budget year, the state's finances will nonetheless be a primary focus stemming from the news of a projected state revenue surplus.
Economic forecast issued
Minnesota Management & Budget recently issued an updated state economic forecast showing a $1.87 billion surplus through the 2016-17 biennium ending June 30, 2017. Minnesota law says $594 million of the surplus funds must be placed into reserves, leaving a balance of approximately $1.2 billion. The February forecast will provide an official and final forecast number.
You can expect a tug of war as various proposals for appropriating the $1.2 billion emerge. One important thing to remember is this excess revenue is an indication that government is over-collecting from taxpayers. Our focus should be on tax relief for families and businesses that were overcharged by the state.
Many organizations are already proposing new spending for 2016. Too much revenue on hand encourages that kind of thinking. Costlier government programming is the last thing the legislature should have on its plate given that the spending trajectory already is too high. Minnesota's General Fund budget for 2016-17 is projected to be $41.585, nearly a 30-percent increase from when Minnesota spent $29.961 billion in 2010-11. The forecast spending for 2018-19 is $44.557 billion.
Prudence also is necessary due to uncertainties in the federal economy and potential turbulence from some external forces, including the federal government potentially raising interest rates. These are still-volatile economic times, and we would be served well to limit our future vulnerability.
Gas tax increase 'dead'
Earlier this year, House Republicans passed a 10-year, $7 billion transportation plan that would fix 15,500 lane miles of road and 330 bridges statewide without raising taxes. Disappointingly to many, this plan was stopped short of enactment because Gov. Mark Dayton and other Democrats insisted on raising the gas tax.
Recently, Gov. Mark Dayton reversed himself and said during a recent press conference that his proposal to increase the state's gas tax is "dead." This is good news for taxpayers who say the state already has enough money to improve roads and bridges, it just needs to be a priority. House Republicans have shown a long-term plan can be set without raising taxes and now, with the gas tax off the table, it should be a top goal for the 2016 session.
MN in terrorism spotlight
Another subject people are interested in discussing of late is terrorism and the radicalization of young Somali men in our state. News reports indicated earlier this week that one of ISIS' most active terror recruiters, from Minnesota, surrendered in Somalia. We also have learned federal officials believe Minnesota has produced more would-be foreign fighters than other states. The federal government has chosen Minneapolis as one of three cities to host pilot programs to combat the recruitment of radicals.
The recent tragedy in San Bernadino has brought new urgency to this subject and, as a state, Minnesota needs to implement strategies to help us understand these threats and protect citizens. I will keep you posted as things develop.
I look forward to hearing from you with your comments, suggestions, questions and ideas.