Minn. budget forecast shows $323 million surplus"MN Budget"
by Tom Scheck, Minnesota Public Radio
February 29, 2012
ST. PAUL, Minn. — State finance officials say Minnesota's budget picture is looking up. They announced Wednesday that the state's budget forecast calls for a $323 million surplus for the rest of this two-year budget cycle, which comes on top of the $876 million surplus projected late last year.
But lawmakers shouldn't get too excited about the new funds, according to Jim Schowalter, commissioner of management and budget. He said state law already directs where the money will go.
"That anticipated $323 million balance does not stick around long," he said. "It immediately goes to replenish the state's budget reserve, and then starts to repay some of the school shifts for our K-12 education institutions."
Several Republicans have said that they want to dedicate the money to start repaying the $2.2 billion school shift. But GOP House Majority Leader Matt Dean said there could be pressure from other members to spend the money on other things. He said his caucus will start discussing those ideas in the next week or two.
The forecast also projects a $1.1 billion budget deficit in the next two-year budget cycle, which begins on July 1, 2013.
Minnesota's economy appears to be doing better than the national average, according to state economist Tom Stinson. But he added there hasn't been much change in the economic outlook.
"The bottom line is the U.S. economy is looking better, but not very much better than was expected," said Stinson. "And certainly it's not booming. It's still 2014 until jobs get back to their pre-recession levels."
Stinson said consumer confidence is looking stronger but he has concerns that uncertainty about the federal budget, the European debt crisis and higher than expected oil prices could affect the economy.