Budget Forecast Up
Given inflation at home and tension abroad, it’s somewhat a surprise that the budget forecast for Minnesota’s immediate future improved by $1.5 billion. Added to the November forecast projected surplus of $7.7 billion, the projected surplus now sits at approximately $9.3 billion. The increased projection is a result of both increased tax collections across the income, sales, and corporate categories and less than projected spending. The largest budget category where spending decreased is E-12 education, which came in $158 million below earlier projections largely due to less-than-expected enrollment.
Here is a link to the web page at Minnesota Managment and Budget that provides the relevant numbers and narrative describing the current situation: MMB Budget Forecast. The summary document is the best document for a quick synopsis of how things have unfolded: February 2022 Budget and Economic Forecast Presentation.
As was the case with the November forecast, much of the increase is one-time money, which may help provide some room for the Governor and Legislature to provide some short-term assistance in areas like the special education cross-subsidy.
As I stated in my first sentence, the risk factors surrounding the forecast are much higher than they have been in the past year and that could have an effect on the long-term outlook. In short, the chances for one-time improvements are pretty high, but probably less so for improvements to base funding initiatives.