by Sen. Kevin Dahle
Today’s budget forecast of $1.871 billion demonstrates Minnesota is finally on sound footing and has eliminated the budget deficits our state has faced for more than a decade. Sen. Kevin Dahle (DFL-Northfield) made the following statement about last week’s announcement.
Today, Minnesota received great news with a strong budget forecast. We are a national leader in economic recovery – and a model for business creation and policies that support economic growth. Our state has finally eliminated the budget deficits we’ve experienced for more than a decade. The strong budget surplus will allow the legislature to pass a balanced and responsible budget to maintain and improve our growing economy.
The budget should include smart investments in transportation, education and continue our commitment to strengthen our rainy day fund. Tax relief will also be on the table – but it must focus on middle-class families and continued economic growth, Dahle continued.
While it is good news that Minnesota has turned the corner after a decade of deficits, many Minnesotans are still struggling to make ends meet. As we work to put together a fair and balanced supplemental budget, it’s essential we also find solutions to expand economic opportunity to all Minnesotans.”
Budget Background Information:
In 2014, DFL legislators pushed for and passed a law requiring that 33 percent of the November forecast be deposited into the state’s rainy day fund until it reaches $2.2 billion. Minnesota’s rainy day fund currently stands at nearly $1 billion. This fiscally responsible decision to keep our budget reserves at healthy levels means $594 million will be deposited, bringing the state’s reserve to $1.597 billion. Strengthening the rainy day fund is economically prudent, and other states are following suite. A strong budget reserve will help ensure our state will be better positioned in the event of future economic downturns.
In addition to shoring up our rainy day fund, Minnesota has repaid schools after borrowing from K-12 education to balance the state budget during fiscally challenging years. Standard & Poor’s also recently upgraded Minnesota’s bond rating outlook, in part because of the state’s strong fiscal position and strong economic performance overall.
Minnesota’s economy continues to do well. The state’s 3.7 percent unemployment rate in October remains the eighth lowest in the nation. Wage growth is projected to be slightly lower than projected in the February forecast of 5.4 percent. However, wages are still expected to grow by 4.9 percent in 2016.