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Hudson: State economic forecast underscores need for tax relief, structural overhaul

Monday, February 27, 2023


ST. PAUL – State officials issued a new economic forecast for Minnesota on Monday, projecting a $17.5 billion surplus for the new biennium.

The bottom-line surplus figure remains in line with the last full forecast, issued in early December. State Rep. Walter Hudson, R-Albertville, said the report signals state revenue continues to grow because this forecast factored for inflation for the first time in decades.

“Revenue continues to exceed previous estimates, which effectively canceled the addition of inflation to the equation,” Hudson said. “It was a wash, and the state still has a $17.5 billion surplus. These are taxpayer dollars, and the taxpayers deserve for them to be returned – starting with fully repealing the state tax on Social Security.

“Our state’s continued over-taxation is a multi-layered issue and I have authored a package of bills to make improvements three separate ways. Together, my bills support sustainable stewardship by helping our state live within its means, protecting taxpayers and setting new parameters for tax increases.”

Just hours after receiving the updated economic forecast, House Republicans on Monday sought to fast-track legislation fully eliminating the state tax on Social Security, a move which House Democrats blocked in a floor vote.

“Democrats have gone on record saying they support ending the state’s tax on Social Security but have been dragging their feet on this issue since the session began and refused to take action Monday,” Hudson said. “But this isn’t the last word on this issue and House Republicans are going to continue reminding them of promises they made to Minnesota seniors.”

Overall, revenue tabulations for the current forecast continued to surpass previous projections for individual income taxes ($565 million) and corporate taxes ($125 million). Sales taxes were down $26 million.

The new $17.5 billion surplus figure will serve as the official framework as the Legislature works to establish a new two-year state budget this session before adjourning in late May.


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