ST. PAUL – Minnesota Management and Budget issued a fourth consecutive semi-annual economic forecast indicating the state has received more revenue than previously projected.
The Feb. 28 report shows a positive balance of $295 million for the 2012-13 biennium. This brings Minnesota to a combined $2.8 billion more revenue than previously projected, dating back to November of 2011.
State law stipulates $290 million of the current excess revenue be applied to paying down K-12 debt, leaving a balance of around $800 million. The remaining $5 million will be placed into the state’s budget reserve, pushing that balance to $694 million.
“This is further evidence the improvements we made in the 2011-12 biennium are working,” said Rep. Dean Urdahl, R-Acton Township. “Our state is headed in the right direction and this shows we can balance the budget for the short term and set ourselves up for the future without having to raise excessive taxes. The key is for our governor and the new Democratic majorities to set a budget which falls within the projected 3-percent rate of revenue growth we expect.”
The MMB forecast also shows the budget shortfall projected for 2014-15 has dwindled from $1.1 billion to $627 million. That shortfall was $4.4 billion before Urdahl and fellow Republicans drafted the state budget in 2011. There also is now a $782 million positive balance projected for 2016-17.
“This turnaround is impressive, especially when you consider we were dealing with a $5 billion shortfall less than two years ago,” Urdahl said. “We eliminated that shortfall, paid off the entire K-12 shift from 2011 and have paid off a sizeable portion of delayed K-12 funding enacted by the previous Democrat majority and Gov. Tim Pawlenty. Not only that, but we have made great strides in replenishing previously depleted reserve accounts.
“I hope this serves as notice that raising taxes in our still-fragile economy is unnecessary. We are on the right track, but cannot afford to view this as a license for excessive spending. Our progress could be derailed if we follow the governor’s proposal to raise taxes by $3.7 billion and increase spending by 7.6 percent. I look forward to continuing working together to continue our economic growth.”