Huge news: the state of Minnesota is looking at a $1.3 billion surplus in the biennium, as the Minnesota Department of Management and Budget announced late last week.
The state’s finances are better than they appeared to be at the end of a special legislative session this year. They’re so good that, for the first time, the state’s reserves are expected to be as robust as state law says they ought to be. The reserves should grow to an estimated $2.4 billion, thanks to this surplus.
So it was no wonder then that so many were abuzz about the much-ballyhooed bounty. Here’s a roundup of comments from elected state leaders and interested others:
‘Caution is important’
“(The) announcement of a positive balance going into the 2020 session is good news, but the economic forecast highlights some significant challenges in the future. When inflation is taken into account, deficits may be on the horizon. Exercising caution is important, as an uncertain economic future could impede our ability to deliver on values like education, health care, transportation, and other items all Minnesotans count on to succeed and prosper.
“We’re up against some short-term challenges, too, including the need to help counties and tribal governments solve problems due to recent payment miscalculations. I’m committed to addressing these issues in the legislative session.”
— Rep. Jen Schultz, DFL-Duluth, in a statement
We can pass ‘strong bonding bill’ now
“There are several strong indicators within the forecast, including a positive balance for the current biennium, continued low unemployment, and a healthy budget reserve. The forecast … is just a snapshot, though, and our economy could eventually slow down, so we need to remain careful going forward. We need to keep our focus on what will help families prosper and this includes investments in great schools, affordable health care for everybody, and good-paying job opportunities in every corner of the state with the help of tools like expanded high-speed broadband.
“Minnesota also has a strong credit rating with low interest rates available to us. We should use this opportunity to come together and pass a strong bonding bill next session, with investments in priorities like our colleges and universities, clean water infrastructure, and new jobs and economic vitality within our communities.”
— Rep. Rob Ecklund, DFL-International Falls, in a statement
‘Responsible budgeting’ is working
“This is good news and a testament to the responsible budgeting in recent years and the work we’ve done to make Minnesota a place people want to live, work, earn an education, raise a family, or grow a business. There are cautionary signs, though, with economic growth set to slow down, and inflation isn’t fully considered. These reasons make it important to direct any new investments toward the areas which will help Minnesotans continue to succeed and prosper, like education, health care, and economic security for families.”
— Rep. Liz Olson, DFL-Duluth, in an exclusive statement to the News Tribune Opinion page
‘Give it back’ to taxpayers
“State government was fully funded in the last session and we still have money left over. We’ve funded our priorities, the savings account is full, and it’s time to give it back. This shows Senate Republican leadership on things like middle-class tax relief and responsible spending continue to benefit the state’s bottom line. This surplus needs to be approached with fiscal responsibility and accountability to the taxpayer — this is their money, after all.
“Minnesota is just one of 13 states that still taxes social security income. We will look at fully exempting every senior citizen from paying taxes on their social security, providing relief for farmers through section 179, and income rate cuts for families. We also want to look at one-time options like: tab fee decreases, school safety improvements, cash for roads and bridges, and keep our borrowing through a bonding bill low in light of the extra cash on hand.”
— Senate Majority Leader Paul Gazelka, R-Nisswa, in a statement
Large surplus not so large
“What looks like a large surplus will be mostly eaten away when we factor inflation into spending. What’s left will be mostly one-time money, and lawmakers should be cautious about how it’s spent, given the future outlook indicates some fairly tight margins.”
— Sen. Erik Simonson, DFL-Duluth, in an exclusive statement to the News Tribune Opinion page
This forecast is an opportunity
“Minnesota has now had seven consecutive years of budget surpluses, a clear indication that more dollars need to remain in the pockets of families and businesses. (The) forecast presents an opportunity for policymakers to enact reforms to best position Minnesota for a strong and growing economy.”
— Minnesota Chamber President Doug Loon in a statement
‘We must protect it’
“This budget forecast is good economic news for Minnesota. And the people of Minnesota have themselves to thank for that. For living here, raising their families here, and contributing to the state’s economy. Minnesota’s economy is working because Minnesotans are working. Minnesota’s economy is also working because we have made smart budgeting decisions. We have been disciplined, kept our eye on the long-term, and invested in the things that make our state grow. Last session, we invested in our children’s education. We protected Minnesotans’ access to affordable health care. And for the first time in nearly 20 years, we gave more than 1 million middle class Minnesotans a tax rate cut. Clearly, this responsible approach to budgeting works. We are in a healthy economic position, and we must protect it.”
— Gov. Tim Walz in a statement
Good, now let’s ‘fund our schools’
“One of the best investments of this larger-than-expected surplus is in a place Minnesotans clearly support: our public schools. Once again, Minnesota citizens turned out in record numbers this fall to support local levies. They clearly understand the need to fund our schools. This surplus represents an opportunity for the state to invest in key initiatives that will improve learning conditions for our students.”
— Education Minnesota President Denise Specht in a statement
‘Great news’ for future budgets
“I’m very happy the reserve account is fully funded. This is great news for the security of future state budgets. And while we have more money than ever, our state agencies are spending with less accountability than ever. I’m expecting the Commissioners to do a deep dive into their budget and account for every penny before they come to the finance committee asking for more funding. Senate Republicans expect the agencies, the commissioners, and the Governor to be more accountable in their spending.”
— Senate Finance Committee Chairwoman Julie Rosen, R-Vernon Center, in a statement
Credit Trump’s tax cuts
“We can attribute this budget surplus to economic growth driven by federal tax cuts. This shows again that pro-growth policies are more effective at generating revenue than confiscatory taxes. There is absolutely no argument for tax increases with such a large surplus. This doesn’t mean lawmakers should go on a spending spree. Weakening manufacturing indicators driven by federal trade policy, coupled with slower employment growth, shows that we cannot take economic growth for granted.”
— Center of the American Experiment economist John Phelan, a regular contributor to the News Tribune Opinion page, in a statement