ST. PAUL – State Rep. Dale Lueck, R-Aitkin, issued the following statement in response to Minnesota Management & Budget on Friday issuing a new state economic forecast which projects a $1.6 billion surplus for the 2022-23 budget cycle, a sharp turnaround from the $1.3 billion shortfall projected in December for the same period:
“This is generally good news, but we need to fully understand the reasons for this significant turnaround as we work out the details of the state’s 2022-23 budget,” Lueck said. “We must take a sober look and not assume we are completely on Easy Street with respect to future state tax revenues. The COVID-19-related federal dollars are one-time money and will not be there indefinitely. Large portions of our economy still remain severely restrained by the Gov. Walz’s restrictive emergency orders.
“Reduced state spending in education was caused when in-person school attendance was shut down indefinitely by emergency order. Parents chose to home school, some moved to private schools or in the case of the very young they were held back for year. Those children that were left only with the public-school option have suffered substantial damage in their progression toward a high school diploma.
“Again, while this latest news is positive, it’s premature to assume that from a budget perspective we can automatically got back to business as usual. In any case, this state surplus should take the steam out of any proposals to raise taxes this session.”
MMB said the turnaround is due, in large part, to an improved U.S. economic outlook that is bolstered by large federal actions that have emerged since November and were not incorporated in earlier projections. The projected surplus also is related to a higher revenue forecast, lower state spending, and an increased surplus for the current fiscal year.