MN Library Legislative Update: State Economic Forecast $1 Billion Surplus

**This legislative update was originally  written by Elaine Keefe, lobbyist for MLA/MEMO** (Received on December 5, 2013 at 4:07:49 PM )

On Thursday the state economic forecast was released and it contains good news!

The state has a projected surplus of almost $1.1 billion. After the school property tax recognition shift is repaid, along with a loan from the state airport fund, $825 million remains on the bottom line. You can read the forecast documents on the Minnesota Management and Budget website: I attended a series of news conferences held today by MMB officials, Governor Dayton, and DFL and Republican legislative leaders. All of them cautioned that things could change between now and the next forecast in late February. Here is a summary of their comments: MMB officials pointed out that the money is not yet in the bank, and that we are only 5 months into the current state fiscal year. They also noted that one way to avoid the need for future education funding shifts would be to build a bigger state budget reserve. Governor Dayton said that if the February forecast shows a similar surplus, he will propose a series of tax cuts. He wants to repeal the business sales taxes that were passed last session (on warehouses, equipment repair and telecommunications equipment). The projected cost of repealing those taxes in the current biennium is $315 million. He also wants to cuts taxes for the middle class by conforming with federal law to eliminate the marriage penalty and expand the working family credit. House DFL leaders seemed supportive of Governor Dayton’s tax cut proposals. Senate DFL leaders said that their top priority was to build up a larger state budget reserve. They were non-committal about tax cuts. House and Senate Republican leaders said the large surplus proved that the tax increases passed last session were unnecessary. They support repealing all of them.

Elaine Keefe Capitol Hill Associates
525 Park Street, Suite 310
St. Paul, MN 55103
office 651-293-0229
cell 612-590-1244