Today we received great and unexpected news when the Office of Minnesota Management & Budget release the November budget forecast showing an estimated state surplus of $876 million.
One of the key priorities of the Minnesota GOP House and Senate majorities is to put the state on a more sustainable fiscal course. Clearly, the cost-saving reforms enacted earlier this year are already paying dividends and the state is heading in the right direction. There is still significant work to do in recovering from the recession, however, we are outpacing the national economy. Please see the Minnesota Management and Budget news release below.
Current law requires the entire state surplus balance be used to restore the state’s cash flow account ($255 million) and the budget reserve ($621 million).
Thank you for your continued support as my legislative colleagues and I work to bring greater fiscal responsibility to state government. Presently, we are in the process of formulating a package of bills for the 2012 session to bring even more efficiencies to Minnesota.
MMB NEWS RELEASE
Current Law Allocates Entire Balance to Restoring Reserves
St. Paul—Minnesota Management & Budget Commissioner Jim Schowalter released the November budget forecast which shows an improvement in the state’s fiscal position. An estimated $876 million balance is projected for the 2012-13 biennium, all of which is used to restore state reserves.
The 2011 fiscal year closed with revenues $358 million higher than expected and expenditures $205 million below prior estimates. Projected revenues for the 2012-13 biennium are expected to be relatively unchanged and projected expenditures are anticipated to be $348 million less. The combination of these factors yields a projected $876 million balance. The majority of projected expenditure reductions are accounted for in the Health and Human Services area.
Long-standing state statute is triggered by this forecast balance, directing this balance to the state’s cash flow account ($255 million) and the budget reserve ($621 million). If the balance were larger, current law would direct the additional dollars to buy-back the K-12 education shift.
“This is obviously good news and a helpful break from recurring budget gaps. It’s also a reminder that Minnesota still has some significant strengths – above average economic performance and the discipline to quickly stabilize its finances. Future risk remains, but at least we now have a cushion,” Schowalter said.
Forecast economic growth is projected down for the remainder of 2011 and 2012 compared to the February forecast but Minnesota continues to slightly outperform the national U.S. economy.
The forecast shows a projected deficit of $1.3 billion for fiscal years 2014-15.
A complete report of the November forecast can be found on the MMB website at www.mmb.state.mn.us.