Minnesota Management and Budget (MMB) today released the 2018 February Budget and Economic Forecast. Minnesota’s budget and economic outlook has improved since November. A surplus of $329 million is now projected for the fiscal year 2018-19 biennium. The revenue forecast for the biennium is up $353 million compared to November estimates.
Higher forecasts for all the major tax types contribute to the change. This forecast reflects increased U.S economic growth arising in part from short term stimulus from federal tax law changes. After accounting for recently enacted legislative budget appropriations, spending for the biennium is projected to be $167 million lower than November estimates.
Federal reauthorization of appropriations for the Children’s Health Insurance Program (CHIP) is the most significant driver of the lower overall expenditure forecast. The improved budget outlook continues into the fiscal year 2020-21 planning estimates with modest structural balance projected for that biennium.
The Twitterverse pundits say:
- The surplus is smaller than predicted (some were saying $1 billion).
- The smaller size will likely stop some legislative proposals in their tracks. (“Smaller-than-expected surplus will be bad news for all the seekers of more spending.”) This may include education spending.
- The tax rewrite plan will be slightly more difficult.
Visit https://mn.gov/mmb/mmbhome/?id=327920 to view MMB’s press release.
See https://mn.gov/mmb/forecast/forecast to access budget forecast documents.