State Budget Forecast predicts $1.869 billion budget surplus
ST. PAUL, MN - Today, Governor Mark Dayton provided the following remarks regarding Minnesota's February State Budget Forecast.
Minnesota's good budget news continues, fueled by our state's continuing strong economic growth. Our projected state budget surplus for the next biennium has increased from the $1.037 billion in last November's forecast to $1.869 billion now. That's an increase of $832 million, caused principally by Minnesota's continued economic growth that exceeded economists' predictions just three months ago.
It's important to put this budget surplus in its proper perspective. When I took office in 2011, our state was still in the clutches of the Great Recession and was facing another projected budget deficit. The legislature and I dealt with it the same way as the preceding governor and legislature. We reduced spending and increased borrowing.
Fortunately, Minnesota's economy has turned around, and, in fact, our state has led the nation's economic recovery. Our success has produced this surplus. It hasn't come from higher tax rates, as some will claim - they haven't changed since the last legislative session.
This surplus comes from more Minnesotans working than ever before in our state's history, and from more of them earning higher incomes than before.
So, what should we do with our collective good fortune? Some will say: "Give it back to ourselves. Let's spend it ourselves on things we want and need." That has appeal, for there are certainly things most of us want and need.
However, we have no assurance that this national economic recovery will last indefinitely. History assures us that it won't. Inevitably, there will be another national economic slowdown or downturn, and Minnesota's economy will be affected like everyone else's. Our budget surpluses will disappear.
So, I propose that we invest our collective good fortune in our collective better future. In education and transportation. For ourselves, for our children, and for our grandchildren. And for the generations that will follow. Since we may not have the same opportunities in the years ahead, it's even more important that we do it now.
My January budget proposal focused on those two principal areas: education and transportation. They will remain my focus in my Supplemental Budget proposal, which I will submit the week of March 9th, after MMB has re-priced current spending in light of the new forecast.
I will propose to fully fund universal pre-K for all of Minnesota's four year-olds, which is partially funded in my current budget. That will cost an additional $238 million in the next biennium.
Universal pre-K also frees up additional scholarship money for low-income parents to afford good child care for their children ages 0 - 3. And my child care tax credit will help working parents better afford those costs for their children.
Affordable higher education is also a crucial investment in our better future. The University of Minnesota has said that an additional $65 million will enable them to free tuitions for the next two school years.
My present budget proposal would pay for half of it. I'll propose to fund the rest, at an additional cost of $32.5 million. In addition to the $30 million I have proposed to improve the medical school, my proposed additional funding for the University totals $95 million.
I will propose the same $95 million of additional funding for MnSCU, which will fully fund a tuition freeze for the first year of the biennium and half the cost of a freeze for the second year. I'll ask them to fund the other half through administrative savings.
And I'll propose adding another $25 million to the State Grant program to help students and their parents better afford those college educations.
My proposed additional increases in higher education funding in my supplemental total $152.5 million.
A couple other priorities are to restore funding for the Minneapolis Park Board at its previously budgeted $3.7 million and to set aside $50 million to implement the expected recommendations of my Child Protection Task Force.
Those new recommendations total an additional $444.2 million - out of the additional surplus of $832 million.
