$2.4 Billion Surplus Expected in State Budget
Posted on October 26, 2023 by Kayla Khang
Minnesota is predicted to enter the 2024 legislative session with a $2.4 billion surplus based on state officials' most recent revenue report.
Minnesota’s surplus was expected to be $1.58 Billion earlier this year, but the most recent forecast update showed a $820 million increase above that earlier projection. This is still a preliminary number, with instability in the economy due to international affairs and continued labor market constraints. The Legislature cannot act on any supplemental budget until it receives the February Forecast.
Impact on Minnesota’s seniors and their caregivers
With news of a surplus, the senior care sector, our caregivers, and the seniors we serve have the potential for increased funding and support. While the political debate over allocating these funds continues, it underscores the importance of fiscal responsibility and prioritizing the needs of the fastest-growing age group in the state: Minnesota’s older adults.
While we achieved huge successes during the 2023 session, especially through investment in Elderly Waiver to support wages and costs of care, we also know there is unfinished business for the Legislature:
- The $300 million for nursing homes did not address the 21-month delay in payment and could not be used for wages, given its one-time appropriation.
- The fully-phased-in EW methodology did not include a means to use the most recently available wage data.
Should this forecast hold, we look forward to ensuring that legislative leaders make good on their post-session promises to finish their work.
Where did the estimated increase in the surplus come from?
According to Minnesota Management and Budget, this surplus comes from various sources, including taxes, internal accounting adjustments, and other revenues, which surpassed expectations by $739 million. The additional $81 Million in the estimated increase in the surplus is due to lower-than-expected general fund spending.
The legislature is set to convene for the 2024 Legislative Session on Feb. 12, 2024. While this forecast is promising, an official budget forecast won’t be given by MMB until February 2024, which will allow both the House and Senate to officially begin refining their supplemental budget. Given that this will be an election year for the House, and with a narrow one-seat majority in the Senate, it is no surprise that State legislators are at odds about how to spend this potential surplus. Senate Majority Leader Kari Dziedzic expressed enthusiasm about using the surplus to maintain a balanced long-term budget. However, Republican legislative leaders in both House and Senate have quickly called for additional tax relief.