WC Minnesota News

With the Minnesota Management and Budget (MMB) office predicting a $1.5 billion surplus for the 2020-2021 biennium, Sen. Torrey Westrom said the surplus shows that plans to return revenue to local communities can work.

“In 2019, we had the first middle-class tax cut in almost two decades and gave property tax relief for farmers from local school bonds, among other areas,” Westrom said in a release from the Minnesota Senate Republican Caucus. “The economy is booming, and the budget surplus, high as it is, shows that we can certainly accomplish our ‘Get Your Billion Back Plan.’”

The state is still in good shape as far as emergency funds as well, he said.

“We have full emergency and state funds, so citizens can rest knowing that any money returning to their communities will not negatively affect necessary programs,” he said.

The $1.5 billion projected surplus is an increase of approximately $181 million over November projections, according to a report from the MMB. The report also states that "the economic outlook is stable but a slowdown remains in the forecast.”

The Republican Caucus noted the current projected surplus is one of the largest for Minnesota and the state reserve of $2.359 billion is considered “fully funded.”

Contributing to that was a $96 million increase in projected revenue and a $91 million decrease in projected expenditures.

The MMB report states that state law will reduce the state reserve by $491 million in the next biennium.

There are potential issues down the road according to the MMB report. They include a projected slowdown in the U.S. economy over the next year with growth continuing at a “moderate” pace of 2.1% through this year, but falling to 1.5% in 2023.

Contributing to the projected slowdown would be factors such as fiscal stimulus dissipating, uncertainty over tariffs and other policy, rising interest rates and a full-employment labor market.