By Rep. Joe McDonald
I am pleased to report we received some outstanding news at the Capitol today: A second consecutive state budget forecast is calling for a surplus.
The projected surplus is $323 million and it follows the $876 million surplus projected last November. Together, that is $1.2 billion to the good in just a few months. It is quite a turnaround, especially when you consider we just erased a $5.1 billion shortfall last year. All told, we are $6.3 billion in better shape now than a year ago.
We faced some unbelievably difficult decisions last year, but these repeated surpluses show we made the right choices. I believe we needed to tug the reins of government spending, create opportunities for job growth in the private sector and stop inefficient/ineffective government practices.
Our alternative was to raise taxes by the billions and I’m proud we resisted those proposals. Minnesota’s unemployment rate currently is 5.7 percent, substantially better than the 8.5-percent national average.
Local businesses are starting to come back and you can sense increased confidence. Entrepreneurs understand this Legislature views them as the backbone to our economy and know we are doing all we can to improve the business climate in our state. I have no doubt tax increases on job providers would have made it more difficult for employers to help people get back to work and help us outpace other states in reducing unemployment.
It was not necessary to increase taxes in Minnesota because we did not have a revenue problem, we had a spending problem. If we can eliminate inefficient government programs – and streamline other worthy programs – we can reduce dependency on our tax dollars. This will help Minnesota citizens and businesses keep more of their money to do with it what they choose. That could mean anything from creating more jobs, to hiring more people, or spending more money in the community.
Our previous surplus funds were dedicated to replenishing reserve accounts, as mandated by our Constitution. The great news is now we will be able to begin repaying shifted K-12 funds. We will put at least $318 million of the new surplus funds toward our schools. A balance will still remain, but it is yet another sign we are pointed in the right direction.
Experts were indicating today’s forecast would show a flat bottom line, or even call for a moderate shortfall. But the budget we produced last year continues to outperform conservative initial estimates and generated another surplus.
Today’s surplus news certainly created a buzz around the Capitol. You can sense legislators are eager to continue working on this year’s reform proposals so we can do even more to get our economy back on track. I just hope the governor sees the good we are doing and enacts our ideas for a better future in Minnesota.
As some of you may be aware, we touted “$34 billion, not a penny more” as we were shaping last year’s budget. The new report shows our spending forecast for this budget season is $33.761 billion … I guess you can say we stuck to our guns.