(The Center Square) – Minnesota projects a $9.2 billion surplus for fiscal years 2022-23, an increase of $1.5 billion from the December $7.7 billion forecast, which was then a record.
Minnesota Management and Budget (MMB) announced the forecast on Monday, citing higher income, consumer spending, and corporate profit forecast results in the boosted revenue projection.
The revenue and spending forecast changes are mostly one-time, and the structural balance in the fiscal year 2024-25 planning estimates remains positive and essentially unchanged from November. However, uncertainty via inflation and international war could dampen the economic outlook.
Minnesota’s economy continues to recover from the COVID-19 pandemic. In March and April 2020, Minnesota lost 416,300 jobs, about 14% of February 2020 employment. But the state economy has recovered 74%, or 307,400 of the jobs lost.
Still, Minnesota’s employment levels are 108,900, or 3.6% lower than in February 2020.
The state’s unemployment rate has fallen to 3.1% through December, the lowest since December 2019, and total employment has risen to 96.4% of the pre-pandemic level.
Senate Finance Chair Julie Rosen, R-Fairmont, called the surplus “out of control.”
“A $9 billion surplus means government took way too much from taxpayers at a time when people are still struggling to afford everyday life,” Rosen said in a statement. “We have a duty to give it back with real, permanent, significant tax relief. No election-year gimmicks or one-off checks. Minnesotans deserve real tax relief. There’s no excuse.”
Sen. John Marty, DFL-Roseville, said the money should help struggling Minnesotans.
“Yet too many families struggle to afford housing and food. K-12 education funding remains far short of the need,” he tweeted. “It’s our moral obligation as a society to address those needs. This is NOT ‘surplus’ money, it is much needed for the well-being of all Minnesotans.”
That $9 billion will determine state spending priorities while recovering from COVID.
Rep. Kurt Daudt, R-Crown, tweeted: “$9.3 billion surplus means government is collecting mind-boggling amounts of money from Minnesotans struggling with inflation and gas/energy prices. We need permanent and meaningful tax relief ASAP including an end to social security taxes & refilling the [unemployment insurance] trust fund.”
Minnesota’s economic outlook is informed by the IHS forecasts for the U.S. and Minnesota, data from the Minnesota Department of Economic and Employment Development (DEED), and Minnesota tax revenues.