Hello from the State Capitol,
Some major news from the Capitol recently centered on the release of budget targets. In order to set a state budget, an overall spending target for the next two fiscal years must be agreed upon by the governor, Senate Majority Leader, and the Speaker of the House.
Minnesota spends $52 billion in our current budget on state government programs. Majority party leadership has now agreed to spend every dime of the surplus, nearly $70 billion total, in our next budget, which is a colossal 35 percent increase in state spending. Most of these spending priorities will also be permanent and ongoing. We are guaranteed to have a deficit next session that will require some equally large budget cuts to fix.
Earlier this session, the majority party approved legislation to include inflation in the budget forecast. Because of this, what would have been a $20 billion surplus was refigured to $17 billion after the factoring in of inflation. As this budget agreement includes a $17.9 billion increase in state spending, the entire surplus would be utilized for this purpose.
It is disappointing that Minnesota had a $20 billion surplus, and of that amount only $3 billion – or 15% - will be dedicated to tax relief. One kernel of good news is eliminating the tax on Social Security income would 'cost' the state $1.5 billion which can still fit within this target. The Democrat leadership has come out against this proposal, but many of their members who barely won their elections promised to do this. So, I am not giving up hope yet. This is the people’s money, and people are struggling to pay their grocery, energy, and gasoline bills, just to name a few. Returning only 15% of this historic state budget surplus to residents during these trying times is just not enough, and increasing spending by 35% over the next two years is just not wise.
Talk to you soon,
Nolan