Senate DFLers Respond to Expected Budgetary Balance
SAINT PAUL, Minn. — Minnesota Management and Budget (MMB) today announced a budgetary balance of $1.544 billion in the new biennium and $456 million in the following biennium. MMB experts warn economic growth will start to slow in the years ahead.
“A $1.5 billion budgetary balance is good news for our state,” said Sen. Ann H. Rest, DFL-New Hope, the DFL lead on the Senate Taxes Committee. “But we need to remember that almost half of this balance is not available for ongoing spending. In the future we can end up with a structural imbalance after inflationary adjustments.”
Statutory allocations, partially resulting from the improvement to the current biennium, add $491 million to the budget reserve which now totals $2.075 billion. Slower economic growth is projected to continue into the 2022-23 biennium, resulting in a slowdown in forecast revenue growth.
“A balanced budget with fiscal stability protects Minnesota’s economy,” said Sen. Dick Cohen, DFL-Saint Paul, who serves as minority lead on the Senate Finance Committee. “Any new spending and tax cuts must be balanced in times we experience economic prosperity. Protecting our state’s economy from future instability is even more prudent now as we anticipate slower economic growth.”
MMB will release a revised budget forecast for the new biennium in February 2019. The governor uses the February forecast as a final point of reference to propose a new two-year state budget for lawmakers to consider.
“A large portion of this budgetary balance is one-time money,” said Sen. Kari Dziedzic, DFL-Minneapolis. “This budgetary balance allows us to have a good conversation about strategic investments that help all Minnesotans. We owe that to Minnesota’s seniors, students, working families, and farmers across the state.”