Minnesota's budget forecast has improved for the 2020-21 biennium.
Minnesota Management and Budget (MMB) is releasing its updated forecast Tuesday, projecting a surplus of $641 million for the fiscal year 2020-21, which ends in June 2021.
It is also projecting a $1.273 billion budgetary shortfall for the fiscal year 2022-23, which begins in July 2021.
Last week, Gov. Tim Walz said the budget forecast would be "materially better" than the spring forecast, which projected a more than $2 billion budget deficit in 2020-21 – the current budget cycle – and an even larger deficit for the 2022-23 biennium.
MMB said in a statement Tuesday:
"Minnesota’s economic and budget outlook have improved since May, when we released a budget projection just as the COVID-19 pandemic was taking hold. With this forecast, higher general fund revenues and lower expected spending result in a projected surplus of $641 million for the FY 2020-21 biennium. The improved budget outlook continues into FY 2022-23, but a $1.273 billion budgetary shortfall remains for that biennium.
"As the pandemic continues, economic challenges also persist. Minnesota has 184,000 fewer jobs than in February and, while the economic downturn has affected all Minnesotans, unemployment has disproportionately impacted lower wage workers."
MMB plans to release additional details about the updated budget outlook later Tuesday morning.
This could be good news for Minnesotans and many businesses who are in need of relief due to the COVID-19 pandemic and subsequent shutdowns. Walz and both parties in the Legislature have expressed hopes of passing a financial support package in the wake of the latest four-week "pause" that has seen restaurants, bars, gyms, and entertainment venues shut down.
That said, Walz has re-iterated that more substantial support is needed at the federal level, and has called on Congress and President Trump to pass a bill providing that support.