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Legislative News and Views - Rep. John Petersburg (R)

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REP. PETERSBURG DISCUSSES LATEST BUDGET SURPLUS

Wednesday, March 08, 2017

As we begin the budget setting process, Minnesotans can rest easier knowing our state continues to show signs of good fiscal health.

 

Not long ago, state economists found that Minnesota has a $1.65 billion budget surplus. This is $250 million more than was expected from our November budget forecast.

 

The experts found that over the next two years, tax revenues are forecast to be $321 million more than the November estimate. Nearly 81 percent ($274 million) of the increased tax revenues are from individual income earners. But that revenue growth is offset by $156 million more in spending than projected. That includes $95 million in E-12 education and $73 million in health care.

 

An improved U.S. economic outlook and positive numbers for key economic data points such as personal income growth, employment, and consumer spending also contributed to the additional surplus revenue.

 

In addition to the current surplus for Fiscal Year 2018-19, our economists are projecting a $2.1 billion surplus for the 2020-2021 biennium.

 

I found the new totals a little surprising, as I was expecting it to stay closer to the $1.4 billion number highlighted in November. With this announcement, the good news is we don’t have to worry about cutting programs we already have in the system. On the downside, we’ve once again collected more from the taxpayers than we need to fund state government.

 

With these continued surpluses, its clear lawmakers still need to focus on tax relief for hardworking Minnesotans this session. We should also be looking to make some dollars available for our transportation needs, especially Highway 14.

 

But in terms of spending on brand new government programs, legislators should remind themselves that government has ongoing obligations that continue to grow beyond the previous year. Some of this surplus will be used to pay for things on which we agreed to spend over the last few years.

 

That said, it is nice to see a positive economic indicator and going forward our goal is to be as fiscally responsible as we can with this money.