Minnesota is forecasting a $1.554 billion budget surplus for the 2020-21 state biennial budget.
The figure was revealed by Minnesota Management and Budget in its 2018 November budget forecast, with a third of this money – $491 million – automatically being saved into budget reserves under state law.
The remaining amount of just over $1 billion will give incoming Governor Tim Walz more room to maneuver in his first state budget, for which he'll have to decide whether to allocate the surplus on spending, tax cuts, or a mixture of both.
Walz will have a slightly easier time passing budgets than Gov. Mark Dayton had in recent years, owing to the fact the Democrats won control of the Minnesota House in November's mid-terms.
The Republicans still control the Minnesota Senate, however they have a majority of just a single seat.
The $491 million allocated to the budget reserve, which is in place to mitigate the risk of a downturn in state finances, brings the total in the pot up to $2.075 billion.
The MMB however did offer a gloomier outlook for future years, predicting slower economic growth on the horizon that will continue into the 2022-23 biennium.
This is due to a mixture of uncertainties, including the current trade tariff war between the U.S. and other major markets including China, as well as stock market volatility and taxpayers' response to the federal tax law changes passed last year, but which becomes more restrictive in late 2019.
Regarding the tariffs, the budget document notes that Minnesota grain and seed exports fell by 30 percent, driven by the retaliatory 25 percent tariffs imposed by China on soybeans.
The document adds: "Other industries likely to be impacted by retaliatory tariffs include pork by-products; motorcycle manufacturing; whey products; kidney beans and white pea beans; outboard motorboats, row boats, and canoes; fresh or chilled pork; bread and other baked items (including pizza); uncoated paper; ceramic articles; and soybeans."