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Rep. McDonald: State’s economic outlook improves

Wednesday, December 2, 2020


ST. PAUL – Minnesota Management & Budget on Tuesday issued a budget forecast which calls for a $641 million state revenue surplus through June 30, reversing a previously projected $2.4 billion shortfall. A $1.3 billion shortfall for the 2022-23 biennium also marks a significant improvement from earlier predictions.  

“I never thought I’d  say I’m grateful to ‘only’ have a $1.3 billion shortfall, but that’s actually quite an improvement over the doom and gloom projected earlier this year,” said Rep. Joe McDonald, R-Delano. “Just think about how much better shape we would be in if the governor would ease the excessive restrictions that he’s placed on so many businesses. Let’s focus on solutions that let all of our businesses safely re-open instead of spending so much time and energy talking about what needs to be closed. In any case, this improved bottom line should eliminate any talks of tax increases in the upcoming session since the state has more than enough in budget reserves to cover the shortfall.” 

McDonald said a $919 million drop in Health and Human Services spending as a result of lower-than-expected Medical Assistance utilization was a key factor in reduced state expenditures, along with a $118 million reduction in E-12 education spending as many parents sought alternative educational options for their children or delayed sending them to kindergarten. 

While this forecast provides a rough framework of figures, an updated February report will set the official numbers from which the Legislature will construct a new state budget.  


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