ST. PAUL – The State of Minnesota received positive fiscal news recently, as our fiscal experts founda projected $1.3 billion budget surplus for the remainder of the 2020-21 budget cycle.
“As far as our economy is concerned, it's good to see state revenues improving," said State Representative Joe Schomacker (R-Luverne). “The economy is pretty strong, especially when you compare where we are today to what was said in our February forecast. Back then, there were stronger indications of a recession next year or a slowdown. Now, those bad news scenarios are no longer being discussed in the same way.”
Schomacker said a number of indicators have led to the $1.3 billion surplus. They include a growing number of sales taxes being collected, rising wages and household wealth, state unemployment lower than the national average, and declining gasoline prices.
“With this news, we should be able to get through a session without talking about tax increases,” Schomacker said. “Minnesota can collect more in taxes if people are able to keep more of their money and spend it, and that’s what we’re seeing now.”
Despite the good news statewide, Schomacker noted that some in southwestern Minnesota are still hurting. Low grain prices and weather made it difficult for farmers to get in and out of the field, if they had a field at all. Schomacker said this has made it difficult for ag producers in our area to compete and have the same positive financial numbers show up in their pocketbooks.
“As we look ahead, we’ll need to be cautious as even a small change in any of the state’s economic indicators can make a difference on the state’s overall economy,” Schomacker said. “I’m glad to see the state’s overall economic picture has improved over the past several months, but there are folks in our area who are struggling with the ag economy, and we’ll look to improve that as we move forward.”