Minnesota's budget outlook improves, now projecting $1.6B surplus

The state was projecting a $1.3 billion deficit in November.

Minnesota's financial fortunes have experienced an upturn in recent months, with the state now projecting a $1.6 billion surplus for the upcoming two-year budget cycle.

The new projected figure was released by the Minnesota Management and Budget (MMB) Friday morning, and shows a remarkable turnaround for state finances a year after the COVID pandemic started.

In July, the state was projecting a $4.7 billion deficit for the 2022 and 2023 financial years after the state shut down to prevent the spread of the deadly virus. By November the surplus was projected at $1.28 billion.

MMB says that the return to a projected surplus is due 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."

However, MMB in its release did announce that the improvements to the economy have "not been spread equally," noting that "unemployment continues to disproportionately impact lower-wage workers."

It will set up a battle in the Legislature over the next budget proposal, with Gov. Tim Walz having recently released a $52.4 billion budget that includes an increase in state taxes for those earning more than $1 million and an increase in the corporate tax rate for large, profitable companies.

This would be used to fund additional spending on schools, internet infrastructure, and providing assistance to small businesses, among other things.

But the plan is being opposed by the Minnesota GOP, which does not want any tax hikes, and currently controls the Senate through which any budget will need to pass.

Walz has previously said he would alter his budget proposal based upon Friday's projections.

Sign up: Subscribe to our BREAKING NEWS newsletters

Next Up

Screen Shot 2021-04-14 at 5.09.01 PM

Defense witness: Cause of Floyd's death 'undetermined'

Dr. David Fowler, former Maryland chief medical examiner, said there were a number of possible factors that could have led to George Floyd's death.

Jorge Polanco

Red Sox sweep Twins in Wednesday's doubleheader

The Red Sox defeated the Twins 3-2 in Game 1 and 7-1 in Game 2.

Minnesota Wild

Wild score 3 power play goals in win over Coyotes

Mats Zuccarello scored twice in a 5-2 victory.

Screen Shot 2021-04-14 at 2.38.15 PM

Viral drone video of Bryant Lake Bowl to be auctioned off as NFT

Non-fungible tokens are the latest craze in consumer finance.

kimberly potter

Here's what the manslaughter charge against Kim Potter says

Activists are calling for more serious charges against the former officer.

Tim Walz

Gov. Tim Walz criticized for comments on 'thoughtful' use of tear gas

The governor is under fire for comments he made Tuesday as protests continue over the police killing of Daunte Wright.

Andrelton Simmons

Twins shortstop Andrelton Simmons placed on COVID-19 list

Simmons is reportedly experiencing mild symptoms.

Screen Shot 2021-04-12 at 8.53.07 PM

Kim Potter to be charged with second-degree manslaughter in Daunte Wright's death

Potter was a 26-year veteran officer before she resigned from the Brooklyn Center Police Department on Tuesday.


State of Minnesota is projecting a $1.3 billion budget surplus

Lawmakers will decide how to spend it in the next session.

Minnesota's budget surplus falls, but is still over $1 billion

It's down nearly half-a-billion from the November forecast.

Minnesota's state budget has a projected $1.5 billion surplus

The Legislature and incoming Democratic governor Tim Walz will have some money to allocate.

Tim Walz

Minnesota's budget surplus grows, but uncertainty remains

Lawmakers have plans for the cash in what is an election year, but caution is being urged.

State Capitol.

Minnesota's budget chief leaving to join University of Minnesota

Myron Frans is being replaced at Minnesota Management and Budget by Jim Schowalter.

State Capitol

Minnesota's budget forecast improves, shows $641M surplus for 2020-21

"Higher general fund revenues and lower expected spending result in a projected surplus," MMB said.

State Capitol.

Walz eyes COVID-19 relief package totaling $300-$600 million amid budget surplus

The state forecasted a budget surplus for the remainder of the biennium.