Minnesota Management and Budget projects $7.7 billion surplus for 2022-23 fiscal year

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The Minnesota Management and Budget recently projected a budget surplus of $7.7 billion for the 2022-23 fiscal year. Following the projection, Governor Walz released the following statement:

“One thing crystal clear: Our economy is strong. Throughout this pandemic, we’ve made decisions to both save lives and protect our economy, and now, we have a remarkable chance to expand economic opportunity for all Minnesotans and move our state forward. It’s time to lower the costs of health care and child care, make it easier for parents to care for a newborn or sick family member, and help Minnesotans make ends meet.”

The Minnesota budget and economic outlook is significantly improved in all years of the budget planning horizon. A general fund budget surplus of $7.746 billion is now projected for the FY 2022-23 biennium. Strong growth in income, consumer spending and corporate profits drove extraordinary revenue growth in FY 2021, and higher tax receipts to date in FY 2022 combine with an improved outlook for income, consumer spending and corporate profits to raise the revenue forecast for the current biennium. Estimates for state spending are down slightly in the current biennium.

The improved budget forecast triggers a statutory allocation to the budget reserve, leaving the reserve balance at $2.656 billion. While economic uncertainty and the pandemic pose significant risk to the forecast, the improved outlook carries into FY 2024-25 planning estimates.

$7.7 billion projected surplus for RY 22-23