With the recent news of a second consecutive budget surplus and unemployment numbers that continue to decline, it's clear the decisions made last session have put Minnesota on the road to economic recovery.
Last session, we made tough choices in order to balance the budget, and rejected the easy and irresponsible choice of raising everyone’s taxes. With an $876 million budget surplus in November and now a $323 million surplus in February, this is the proof that tax increases are not the answer to growing an economy.
When Republicans took over the Legislature in 2011, Minnesota faced a $5 billion deficit, and unemployment was 7.5 percent. After enacting dozens of new reforms during the past session, Minnesota now has a $1.2 billion surplus, and unemployment has plummeted to 5.6 percent just one year later.
More good jobs news: According to the most recent Department of Employment and Economic Development (DEED) report, Minnesota added 15,500 jobs in January. It also noted that private sector job growth has been particularly strong, adding 27,200 jobs in the past two months alone.
Our policies are encouraging business owners to expand their workforce, and we are seeing the results through increased income tax and sales tax collections.
According to state law, this latest $323 million windfall already has a home. The first $5 million heads to budget reserves, while the remaining $318 million will be used to pay back the school payment shift that was enacted by the current and previous legislatures.
Solving a $5 billion deficit last session was brutal, but to see a $6 billion turnaround in just one year is definitely gratifying. Last year’s budget, the often forgotten Reform 1.0, helped begin bringing fiscal responsibility back to Minnesota. Now we must continue to bring forward more reforms that will bridge the gap between government’s appetite to spend - and the resources of Minnesota workers. That’s what the Reform 2.0 agenda is all about, and it’s why we continue our fight to improve government and make it more efficient – because it’s proving to be effective.
These two consecutive positive budget forecasts totaled a $1.2 billion surplus. We made this happen not by raising taxes, but by spending less – and then using the savings to pay down debt. This is the epitome of fiscal responsibility, and I’m pleased to see the results are a dramatically improved state economy.