Minnesota’s Economy: Growing Stronger Every Day
Nearly every day we receive more confirmation that it is good to be a Minnesotan. The Minnesota Management & Budget’s release of the November budget forecast showed us we are in even better financial shape than we thought with a sizeable $1.086 billion projected surplus FY 2014-2015. The state was able to pay back the final $246 million from the 2011 K-12 school shift. We have erased our years-long debt, leaving us with a projected surplus of $825 million. In fact, this will be the first time Minnesota has experienced a budget surplus in years.
We saw such an increase in our budget forecast thanks in large part to revenue gains. This strong forecast shows that Minnesota’s economy is performing well. The rest of the surplus is due to $247 million in below budget spending. What does this all mean? It means Minnesota’s economy continues to build momentum, and this month’s strong economic forecast confirms that the structurally-balanced budget passed by the legislature has put the state on stable economic footing for the first time in years. This forecast shows how a straight forward budget, without gimmicks or borrowing, has created the confidence and stability necessary for Minnesota’s strong economic growth.
The good news is everywhere, not just in our budget surplus but in jobs gains and an unemployment rate that is steadily declining. Minnesota’s unemployment rate fell to 4.8 percent in October – the lowest level since the recession began in 2007. Meanwhile, first-time claims for jobless benefits have fallen to levels not seen in more than a decade! Further proof that our economy is growing – the Bureau of Economic Analysis (BEA) reports the state’s real GDP rose 3.5 percent in 2012, ranking it among the six fastest-growing state economies in the country.
Having celebrated the good news, I would like to take this time to caution against deciding what to do with the surplus without thoughtful deliberation. We must remember that the November budget forecast is just that, a forecast, and therefore subject to change. Just a year ago, the state was facing a $1 billion deficit, so we’ve seen that a lot can happen in a year. Let’s take the next few months before the start of session to pace ourselves and think long and hard about what are the best investments for Minnesota’s future.
There have been many suggestions made for ways to use the projected budget surplus. One popular idea is tax relief – and that could come in several different forms. There is also one campaign gaining steam this fall that is close to my heart, and that is the 5% Campaign. This effort is lead by Minnesota care providers for both seniors and the disabled who were left out of any wage increases in the last session, and in fact, most haven’t had a wage or cost of living increase in 5-7 years. This group of hard-working Minnesotan’s currently makes just above minimum wage, yet they take care of our family members with the greatest needs. Nearly every Minnesota family, at one time or another, will be impacted by the great service these workers provide. This campaign is working to get care providers a 5% wage increase. As many of you already know, in addition to my Senate duties I work on behalf of people with disabilities and am committed to providing the care they need and deserve. These care providers are essential to improving the quality of life for both the elderly and people with disabilities, and they deserve a wage they can raise a family on.
While it is justified to think about ways to improve the lives of Minnesotans, it would not be responsible to make promises to families and businesses about preliminary surplus dollars when we will have more accurate, up-to-date information in just a few months. Let’s take this time before February 2014 to think long and hard about what direction we want Minnesota to head in, and how we want to get there. Please contact my office with any recommendations.