Minnesota’s Budget Outlook Stable, Despite Slower Growth
FY 2016-17 Forecast Balance Now $900 Million
Minnesota’s economic forecast was released today by the Minnesota Management & Budget (MMB). Although there is a surplus, it is not what most expected. The disappointing news is the FY16-17 budget balance is lower since the November forecast due to slow down in economic growth. Recall the November forecast projected a $1.2 billion surplus, now adjusted to $900 million.
The forecast will drive many of the decisions at the State Capitol and more specifically the amount of revenue available for transportation, tax relief and education.
According to MMB, the good news is a positive structural balance and the budget outlook remains stable. Another positive is that reserves are highest in state history and the schools have been paid back both of which will help ensure we will not borrow from schools in future.
For more information visit Forecast Flash: http://mn.gov/mmb/forecast/forecast/
After MMB presented, members of the House and Senate leadership shared their thoughts on the surplus and report. The overall common theme was to exercise caution and a warning that everyone may have to lower expectations for ongoing spending.
Senate Majority Leader Bakk said his take away was, “Maybe we were a little too optimistic in November and now feels like where we were in June when everyone went home.” Speaker Daudt joked that he was wrong on his prediction Thursday during a session preview, but quickly moved to a message of working on a solution and economy that all Minnesotan’s can feel good about.
Lawmakers now begin the real work as they weigh all the wants and needs and determine which ones survive the 2016 legislative session that kicks off March 8 at noon.
Legislative Leaders Preview 2016 Session
One day before the revised state budget, there was a Pre-Legislative Session Press Conference at the new Senate office building. It was a spirited discussion uncovering legislative leaders priorities for 2016.
All four of the legislative leaders and the Governor sat a table across from a multitude of reporters from across the State and answered questions on a wide range of topics, from taxes to transportation to education. At times, there were very uncomfortable moments of finger-pointing (literally) and colorful exchanges of ideas. When all was said and done here are the a few of the priorities they cited:
Governor Mark Dayton – education with an emphasis on early education and student debt.
Representative Kurt Daudt, House Majority Leader – tax relief and a transportation bill without raising gas tax.
Senator Tom Bakk, Senate Majority Leader – a long-term, comprehensive transportation plan and funding for the mandated Teacher Development and Evaluation.
Senator David Hann, Senate Minority Leader – tax reform.
Representative Paul Thissen, House Minority Leader – early learning and broadband expansion.
Finally, each participant was asked whether they believed the economic forecast would come in higher or lower than the November forecast. Now we know, Representative Thissen was the only one to get the answer right – he predicted the forecast would come in lower.
Watch the press conference here.