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On December 7, 2021, Minnesota Management and Budget (MMB) released its November Budget Forecast, projecting that the state will have a $7.7 billion budget surplus for FY 2022-2023. This would be a record surplus for the state of Minnesota. MMB releases detailed analyses of state finances in November and February, providing the Legislature with a guide for their work.
According to state economist Dr. Laura Kalambokidis, the projected surplus and revenues are driven by strong growth in income, consumer spending, and corporate profits. The surplus does not include unspent federal money from the American Rescue Plan or the recent infrastructure bill. Additionally, the size of the surplus creates a lot more room for different types of bonding projects due to all the extra cash as well as a much larger bonding bill.
Legislators return for session on January 31. The budget forecast sets up a showdown at the Legislature for what to do with the surplus. Governor Walz and Democrats have indicated that the money could be used in a supplemental budget to lower the cost of healthcare, improve access to childcare, and address the lack of affordable housing. Republicans are calling for tax relief and to refill the state’s unemployment insurance fund.
An excellent summary and analysis of the budget forecast can be found here: bit.ly/3pBSUn5
We will continue to monitor legislative and budget activity and provide updates.
Editor’s note: Joseph is the Cook County Chamber representative in St. Paul.
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