On Tuesday, Minnesota Management and Budget (MMB) released the November Budget and Economic Forecast which shows the state’s general fund budget surplus is projected to be $7.7 billion for the FY 22-23 biennium.
The budget surplus reaches a whopping 15% of projected expenditures ($52 billion) for the biennium and includes $3.1 billion cash in the bank for spending this coming session which is left over from the last biennium. For FY 24-25, there is a projected surplus of $5.9 billion. The future risks that could impact this forecast are the pandemic’s path, inflation, labor force participation, and potential supply chain issues. The budget surplus was boosted by higher-than-expected durable goods spending, wage and salary income growth, and corporate profits. You can review all the materials on the November forecast from MMB here.
This is the largest budget surplus in state history, marking expectations for significant investments by the Legislature this upcoming legislative session. The forecast figure does not include the $1.1 billion left to spend from the federal American Rescue Plan. However, the assumptions underlying the figure do include the positive impacts from the passage of the federal relief packages and the federal infrastructure bill. The budget forecast triggers a required allocation to fill the budget reserve to 4.8% of general fund spending, putting the budget reserve balance at $2.6 billion.
CGMC issued this statement to the media from CGMC President Pat Baustian in response to the surplus announcement. We will continue to push the Legislature to utilize this significant budget surplus to support Greater Minnesota communities with much-needed investments in water and wastewater infrastructure, child care and housing programs, and an increased Local Government Aid allocation.
