Greetings from the Floor,
The big news this week in St. Paul was the release of the February budget forecast. The forecast projects a surplus for the remainder of the fiscal year 2018-2019 biennium of $329 million dollars. This is an improvement of the November forecast which projected a $188 million deficit. The change in the forecast is a result of the passage of the federal tax bill last year, higher than expected revenue collections and lower than expected state spending. The higher revenue collections came from individual income taxes, corporate taxes and sales taxes. The lower state spending is a result of the federal government reauthorizing funding for the Children’s Health Insurance Program (CHIP) and less than expected spending in some areas of the education budget.
The forecast also projects a surplus for the 2020-2021 biennium of $313 million. While this is all good news, certainly better than the deficit projection from November, I don’t anticipate much supplemental budgeting to happen this session. I do think we need to put some money into the MNLARS system; however, we should have conversations about the absolute amount it will take to fix the system and what other sources of funding may exist other than General Fund dollars. A motion was made on the floor yesterday to appropriate $10 million out of existing Driver and Vehicle Services (DVS) funds, but was defeated. I voted for the motion to allow MN.IT (the state’s information technology agency) to continue the work they’ve started over the last couple of months to fix MNLARS. Because the motion was defeated, contractors the state hired will have to be let go, and system fixes will be delayed.
Some other aspects of the February budget forecast are that the state’s economy continues to be strong with economic and wage growth continuing as well as unemployment levels remaining low. Concerns of the forecast are more from the national perspective with questions over U.S. trade policy and estimates that U.S. GDP projections may slow down beginning in 2020. For more information about the forecast, please go to: https://mn.gov/mmb/forecast/forecast/.
Thank You for the Opportunity to Serve,
Ben