By Ivan Raconteur
Herald Journal Editor
Last week, Minnesota legislators commented on the latest state budget forecast, which shows a $323 million surplus.
“We received news of a second consecutive state budget surplus today. What we are doing in St. Paul to get our state economy back on track is working,” State Representative Dean Urdahl (R-Grove City) wrote in his e-mail newsletter.
“Our economic turnaround is remarkable. We eliminated a $5.1 billion shortfall last year and have generated a combined $1.2 billion in surplus funds the last two forecasts ($876 million in November and $323 million now).
“That’s a $6.3 billion improvement since last year, largely because the budget we passed in 2011 limited government growth, provided long-term spending restraint, and created opportunity for private-sector job growth. We reduced our projected government spending increase from 22 percent to 6 percent. Now, we have less government and more money.
“Speculation was this new budget forecast from Minnesota Management and Budget would show a flat bottom line, or maybe even reveal a shortfall of $200 million or so. But the budget we enacted last year continues to perform beyond initial projections.
“Again, what we are doing is working. Our state’s 5.7 percent unemployment rate is considerably better than the 8.5 percent national average. This difference is greater than normal, a key indication Minnesota’s economy is getting back on track more quickly than others. This positive economic growth may have been stifled had we raised taxes by billions of dollars as some proposed.
“I am very pleased this improving outlook allows us to pay back at least $318 million of the k-12 school shift. We still have a long way to go for a full payback, but it is good we are able to begin the process.
“Government reform remains a top priority this session at the capitol in order to put our state on even better fiscal footing for the future. The last two budget forecasts should serve as tangible evidence the difficult choices we made in 2011 are paying dividends. This should provide us with even more incentive to stay the course to help us reach full economic recovery and better withstand the impact of future downturns,” Urdahl wrote.
State Representative Ron Shimanski (R-Silver Lake) wrote in a statement last week that slowing government growth and lower unemployment rate are contributing to surplus.
“Wednesday, lawmakers received annual state budget projections. Minnesota Management and Budget indicated Feb. 29 another budget surplus of $323 million,” Shimanski wrote.
According to Shimanski, during the 2011 session, legislators trimmed budget to eliminate a $5.2 billion budget deficit while implementing structural reforms. Unemployment in Minnesota has decreased to 5.7 percent, much lower than the national average of 8.5 percent.
“This new surplus is more good news for the state budget,” Shimanski said. “This is a good sign that our economy is continuing to improve.”
He noted that the state has erased a $5.2 billion deficit and, within eight months, Minnesota has seen $1.2 billion in surpluses.
“The surplus funds have been allocated according to state law to replenish reserves, with $318 million as the first installment going toward paying back the k-12 education shift, Shimanski Wrote.”
The recently released Office of Minnesota Management and Budge February Forecast projects a positive balance of $323 million, on top of the November forecast of $876 millionState Senator Scott Newman (R-Hutchinson) wrote in a release last week. “This February budget forecast is important because it sets the final numbers for the upcoming fiscal year 2012-13, Newman wrote.
“In accordance with the current law, the positive balance will be used to pay $5 million to the state’s budget reserves, and $318 million to buy-down the school shifts. I am very pleased with today’s numbers, which represents our responsible budget-making process in the previous session.
“What does this all mean? Minnesota is moving in the right direction, providing better economic opportunities for our businesses and workforce,” Newman concluded.