Minnesota budget surplus projected $492M less than previous forecast

February 28, 2019 06:48 PM

The state's budget surplus for the next two years is expected to be $1.052 billion, according to the Office of Minnesota Management and Budget.

That forecast is $492 million less than what was projected in November.

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"Slower projected economic growth and lower observed collections compared to prior estimates result in a reduced revenue forecast throughout the budget horizon," MMB officials wrote in a statement Thursday. "A slightly lower expenditure forecast partially offsets the overall reduction to the projected balance."

RELATED: Minnesota budget forecast expected to show smaller surplus

Despite the slight downturn, Gov. Tim Walz doesn't plan major changes to his budget proposal from last week that called for $2 billion in new spending and more than a billion dollars in tax increases.

"This is a fiscally responsible budget and bonding bill that exactly at this time of slower economic growth will continue to position Minnesota amongst the best states not only in the Upper Midwest, but in the country," Walz said at a noon news conference on Thursday.

Republican legislative leaders said the new economic information should result in lower spending and no tax increases, including increases in the gas tax.

"What we would not do is go out and binge spend," Republican Senate Majority Leader Paul Gazelka said. "When I hear what the governor's proposing...it's significant spending increases when you have a downturn. And we just think that's very, very unwise."

The governor says he will submit a revised budget proposal next month taking into account the new budget forecast.

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