Dear friends and neighbors,
Less than two years ago, we came to the Capitol facing a $600 million budget deficit and more than $800 million owed to our schools.
Today, we learned that the state has $811 million in its rainy day account – a record.
We can credit the balanced approach we used in our work on the state budget in 2013. It gave us a $1.2 billion surplus, and for the first time in a decade Minnesota’s budget is structurally balanced into the future.
That allowed the legislature to add an additional $150 million to our reserve while still maintaining our surplus – an estimated $600 million – into the next biennium.
“This action is a substantial step towards additional budget stability and prudent financial management for the state,” Minnesota Management & Budget Commissioner Jim Schowalter said. “Increasing the budget reserve helps the state manage economic risk and is viewed positively by the state’s bond rating agencies.”
The last time Minnesota increased its budget reserve was 2001 when it was set at $653 million. Legislation passed during the recently completed legislative session allowed us to increase to $811 million and will dedicate a third of any future budget balances to the reserve.
This is the kind of smart financial planning that will help keep Minnesota moving in the right direction.
Andrew