State Representative Paul Torkelson (R-Hanska) said Minnesota’s latest budget forecast shows tremendous improvement from where it was two years ago.
For the remainder of the 2012-2013 budget cycle that ends June 30th, the forecast projects a $1.3 billion surplus. In November 2010, Minnesota was projected to have a $6.2 billion budget deficit, but thanks to the work of a Republican-led Legislature, revenue collections have outpaced state spending by $2.5 billion in the last calendar year alone.
“In the last budget cycle, we were handed a mammoth deficit, a nearly emptied budget reserve account, and an IOU to state schools worth nearly $2 billion,” Torkelson said. “Thanks to spending and tax restraint, our economic condition has improved dramatically, our reserves are full, and we’ve nearly cut the amount borrowed from our schools in half.”
In November 2010, Minnesota had $9 million in budget reserves and $266 million in its cash flow account. Today, it has $644 million in budget reserves and $355 million in its cash flow account.
For our next budget cycle, Torkelson said the state financial experts project a $1.1 billion deficit. That projection has also decreased by more than $3 billion in the past two years.
“Over the years, the updated February forecast has improved the budget projections – many times significantly,” Torkelson said. “If the revenue trends continue, a projected deficit now could disappear in three months.”
Finally, Torkelson noted that the new Democrat-led Legislature and Governor Dayton have already begun discussing tax increases as a way end the continuing cycle of budget deficits.
But Torkelson points out that budget experts found that if the Legislature does nothing this session, Minnesota is projected to have another budget surplus during the 2016-17 budget cycle.
“Minnesota’s financial standing is much better than it was two years ago thanks to sensible spending and government reform, and I’m hopeful the next Legislature will adapt many of the same policies that created this economic success,” Torkelson concluded.