ST. PAUL – State economists have unveiled their most recent fiscal forecast projection, and while a $900 million surplus is expected, the amount isn't as high as previously believed.
"While it's somewhat disappointing that the projected surplus has dropped somewhat from $1.2 billion, we wouldn't have a surplus at all if Democrats were still in control of state government because they would have spent us into a deficit," Gunther said. "With $900 million, we can still provide needed tax relief to middle-class Minnesotans."
The state's financial experts found that slower growth was to blame for the lowered surplus expectation.
While state spending was lowered by $129 million, revenue collections were also down by $427 million, leading to a decline of $306 million. This reflects a $311 million decrease in sales tax receipts, which tells Gunther that Minnesotans are spending less on goods and services.
"We should view this surplus as an opportunity to get more money back in the hands of Minnesotans," Gunther said. "If you allow people to spend more of their hard-earned income, they will. Any surplus exists because Minnesota collects too much from Minnesotans. So if we are able to give hardworking residents more money to spend, they will inevitably help improve our economic climate by buying more items and paying more sales taxes."
Gunther also noted that Minnesota's rainy day fund now stands at roughly $2 billion.