Minnesota budget surplus grows again, now estimated at $2.4 billion

Five months after the end of the legislative session, Minnesota’s budget surplus has grown again.

Minnesota Management and Budget (MMB) released its end of the biennium report this week, finding that the state’s balance is around $820 million higher than estimated when the session ended in May.

MMB cited increased revenue adjustments, which accounted for $739 million of the increase, and slightly lower spending than estimated earlier as the reason for the higher balance.

That number is then added to the state’s projected surplus, which was estimated at $1.58 billion in May, pushing it to around $2.4 billion.

Senate Majority Leader Kari Dziedzic sent the following statement to 5 EYEWITNESS NEWS:

“It’s good news that our state has a projected budget surplus. Minnesota is fortunate to have a diverse and thriving economy, and the latest budget report is a strong sign that many of our businesses and workers are doing well. However, with so much uncertainty in the U.S. House of Representatives and its ability to pass a budget, and conflicts across the world, we know that our budget picture can change.  Minnesota benefits from having functional legislature that has enacted a balanced long-term budget that prioritizes building an economy that works for everyone. In the coming months, we will continue to listen to Minnesotans as we develop our budget priorities for next year.”

Another budget forecast is expected in February, and lawmakers will start a new legislative session on Feb. 12.

Minnesota Republicans jumped on the increased projection, calling it evidence of too much taxing and careless spending by Democrats.

“Democrats just passed the biggest budget ever with $10 billion in tax increases, and we are still over-collecting from Minnesotans,” Senate Minority Leader Mark Johnson (R-East Grand Forks) said in a statement. “While it’s not surprising Democrats are talking about spending all this money, it’s a complete disservice to the taxpayers struggling to make ends meet. They deserve permanent tax relief this upcoming session, not another runaway train of spending.”

“This last session, Democrats blew through the record $17.5 billion surplus, increasing the state budget by 40 percent while failing to deliver on their campaign promises like fully eliminating the tax on Social Security and $2,000 rebate checks,” House Minority Leader Lisa Demuth (R-Cold Spring) added. “Given this last year’s irresponsible spending spree, tax relief should be the only option on the table for any additional surplus.”

The inflation-adjusted surplus was a record $17.5 billion back in February, according to MMB, but much of that was used by legislation that passed during this year’s legislative session, one in which the DFL controlled the Minnesota House, Senate and governor’s office for the second time in 31 years — and the first since 2013-14.

Around $1 billion of the surplus was used for direct rebate checks, which were sent out this fall. That was around $144 million less than the checks were initially expected to total. The checks totaled $260 for individuals or $520 for couples, with another $260 per dependant up to a max of $1,300 total.

The two-year budget signed into law by Gov. Tim Walz in May totaled $72 billion, covering a wide range of topics. For more information on what lawmakers approved this spring, check KSTP’s Legislative Tracker.

5 EYEWITNESS NEWS has reached out to the offices of Walz and the Minnesota House DFL majority leader for comment on MMB’s latest projections and will update this story if responses are received.