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State Budget Surplus Grows, Economic Growth Predicted to Slow

Minnesota’s latest budget forecast was released last week, showing a $1.544 billion surplus for the next biennium but also predicting a slowdown in economic growth. Positive reaction to the state budget surplus at the State Capitol was accompanied with a note of caution. 

Democrats called the forecast positive, but both Governor-Elect Walz and incoming House Speaker Melissa Hortman noted that it does not include inflation. Hortman said the real surplus, after inflation, was $382 million and that is what people should be working from when looking at potential new spending next session. 

Walz and his DFL colleagues also warned about using one-time money, which makes up a sizable chunk of the surplus, to fund ongoing investments. In terms of priorities, Democrats said rising health care costs for Minnesota was something they want to address early and aggressively.  

Republicans lauded the forecast as proof of the sound budgeting decisions over the last biennium and said it should put to rest any discussions of new tax increases. Senate Majority Leader Paul Gazelka expressed openness to looking at tax cuts next session but above all spending must aligns with revenue. 

The next budget forecast will be released in late January/early February and is typically the forecast by which the Governor and lawmakers develop their budget priorities. 

Full details on the November can be found at the MMB website.

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