A bipartisan group of legislators heard from testifiers on the state budget and the information on the overall economy. Commissioner Frans indicated that the February forecast that projected budget surpluses will be flawed as a result of the pandemic. The forecast is critical as legislators use the report to make spending and revenue decisions during the legislative session. At the time of their testimony, they anticipated a new forecast being developed, but it was unclear when it would be ready.
Nonpartisan fiscal staff told members about Minnesota’s allocation under the federal stimulus bill (CARES Act) in response to the pandemic. As part of that proposal, state governments and local units of government were given more than $2 billion in financial assistance. The allocation for the state will be roughly $1.869 billion, while local units of government can anticipate receiving $316.9 million.
In a separate hearing late last week, Dr. Neel Kashkari, President of the Minneapolis Federal Reserve, discussed the unique challenges the pandemics brings to our economy. He stated that economic recovery is still difficult to determine because of the unpredictability of COVID-19. In his remarks, he also said it is important that we support our health care system because it will translate into faster economic recovery.