The following statement was delivered by Governor Mark Dayton following this announcement.
“This forecast is complex; and does not lend itself to a single, simple explanation.
“It is also fraught with uncertainties, particularly around the federal tax bill and other pending federal actions. For example, if Congress refunds the CHIP program, as they must, the projected deficit for the current 18/19 biennium drops from $188 million to $10 million.
“This forecast is not saying that the U.S. economy and the Minnesota economy are not expanding, because they are; but rather they are not expanding quite as much as last February’s forecast assumed. Based on that forecast, the Legislature and I – and I’m not casting any blame on anyone here – we collectively cut state taxes and increased state spending, particularly in areas like transportation; early childhood, K-12, and higher education; the health insurance rebate; and reinsurance.
“All of those initiatives combined used up most of the projected surplus. Now, with a new, less optimistic economic forecast, we have slightly exceeded our budgetary limits.
“That is readily correctible, and I commit to doing so in the next legislative session.
“I want to emphasize that our state’s overall fiscal situation is very solid. We have accumulated a Budgeted Reserve of $1.6 billion, more than enough to support us through any of these economic uncertainties.
“As our state’s 3.3 percent unemployment rate attests, Minnesota’s economy is very strong and continues to grow. So, again, my goal in the next legislative session is to make modest corrections in future revenues and expenditures to restore structural budget surpluses for both this and the next biennium.
“As I have said before, I intend to wait for next February’s budget forecast, before I finalize my budget recommendations. Some of the questions surrounding this forecast will be answered during the next three months.
“Next February’s forecast should provide us with a more reliable guideline for the fiscal changes the Legislature and I will need to work together to make.
“The need for those modifications underscores the imperative that we re-establish constructive working relationships between the legislative and executive branches before and during that session.
“We will have our honest disagreements; that is to be expected.
“However, we all share a responsibility to the people of Minnesota to work together for their best interests.
“I pledge to do my part to contribute toward that goal.”
To listen to audio of the Governor’s remarks following the announcement,
click here.
