State officials on Friday unveiled an eagerly awaited budget forecast: Minnesota has a projected $1.23 billion surplus for fiscal years 2014-2015.
That's up significantly from an estimate from late last year.
A November budget forecast, released in December, had predicted a surplus of roughly $1.08 billion, although $246 million of that was spoken for – it will be put toward repaying a debt to the state’s K-12 school fund, borrowed during the recession.
Since November, revenue projects have increased by $366 million and spending projections have decreased by $48 million, Minnesota Management and Budget Commissioner Jim Schowalter said in a short statement about the surplus.
“I don’t want to get too much irrational exuberance here,” Schowalter said earlier this week, the Star Tribune reported, “but things are going well.”
The forecast sets up a framework for the work of state lawmakers in this year's legislative session, which just began Tuesday and runs through mid-May.
Instead of fretting over deficits, lawmakers have more favorable options: Cut taxes, increase spending, or set money aside in a reserve fund for the next economic downturn (or all three).
Republicans have said they favor tax relief. Senate Majority Leader Tom Bakk has said he wants to set money aside for a rainy day.
Republicans were quick to note that Dayton and the DFL-controlled Legislature spurred the surplus through tax increases approved last year.
“While Governor Dayton and DFL legislators take a victory lap over the projected surplus, Minnesota families and small business owners are getting stuck with the bill," GOP gubernatorial candidate Kurt Zellers said in a statement. "Only in politics could someone raise taxes by $2 billion and then cheer over a $1.2 billion surplus."
GOP gubernatorial candidate Scott Honour said in a statement this week, "Governor Dayton’s newfound love of tax cuts has everything to do with his future, and very little to do with Minnesota’s. After last year’s $2 billion tax hike, giving Minnesotans a little of their money back this year is like someone stealing your wallet then handing you back a bus pass, a rewards card, and a few ones. It’s better than nothing I suppose, but your family’s not better off."
The DFL-controlled House this week is already working to cut taxes. A House tax panel Thursday approved a $500 million tax cut package that will benefit middle-class families and business, the measure's proponents say.
More details about the surplus were expected at an 11 a.m. news conference.
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