The Minnesota Management and Budget agency released their February budget forecast Friday and projected a positive budget balance of $1.6 billion for the biennium beginning July 1, 2021. The forecast reflects higher revenues than previously projected, lower state spending, and the effects of new federal aid.
“The February forecast is good news for Minnesota’s economic health. We have been able to save lives during this pandemic while protecting our economy, but we can’t lose sight of those who are being left behind in the pandemic and in this recovery,” said Senator Jim Carlson (DFL-Eagan). “The updated budget projection reflects that many Minnesotans, especially those with higher incomes, have done well during the pandemic, but our low-wage workers have been hit hard. Many have lost jobs, seen hours reduced, and been asked to take on unprecedented risk to continue working during the pandemic.”
The February forecast showed a significantly different picture than the November forecast, moving from a $1.3 billion shortfall to a positive balance of $1.6 billion. Minnesota added $47 million more in revenues for the current budget year ending June 30, 2021, and $50.9 million for the biennium that begins July 1. Minnesota Management and Budget has stated that this is primarily due to an improved U.S. economic outlook bolstered by large federal actions that have emerged since November and were not incorporated in earlier projections.
“Today’s news shows the great urgency and need to begin drafting our two year budget with the knowledge that this is only good news for all Minnesotans if we put working families and those hit hardest by the pandemic first. We can recover stronger than ever by ensuring no one is left behind,” said Senator Carlson.