Projected state budget surplus provides opportunities

The projected $1.037 billion state budget surplus provides the opportunity to continue investments in people and programs that keep Minnesota strong, leaders of unions and other organizations said.

The twice-annual forecast from Minnesota Management & Budget provides a snapshot of the state’s economy and predicts if the state should have a projected surplus or budget deficit. The positive balance largely is a result of higher tax collections and lower-than-expected spending, especially on Medical Assistance.

The new estimate paints a vastly brighter picture than that of just three years ago, when the state was facing a deficit of more than $1 billion.

Gov. Mark Dayton will use the forecast in developing his budget proposal that must be submitted to the Legislature by Jan. 27. He indicated Thursday that a child care tax credit, rural broadband expansion, transportation system upgrades and early childhood education scholarships will be priorities.

“Today’s budget forecast confirms that putting middle-class Minnesotans first has strengthened the state’s economy. Governor Mark Dayton and the DFL Legislature’s middle-class agenda has produced a growing economy, more jobs and a budget surplus for the current and next biennium,” noted Chet Jorgenson, president of the Minnesota Association of Professional Employees.

“This forecast is proof that investing in key priorities and fairly raising revenue when needed works,” said Shar Knutson, president of the Minnesota AFL-CIO. “Lawmakers should continue that trend in 2015 as the Legislature addresses our aging and underfunded transportation infrastructure.”

Deb Fitzpatrick, director of the Humphrey School of Public Affairs, said expansion of child-care assistance would boost the economy.

“As we’ve come out of the recession and reinvested in other parts of our budget, child care is one area where we’ve continued to lag,” she said. “That really compromises our ability to have those women in the workforce, to have those kids in stable, safe places while families are working.”

Fitzpatrick said there are currently more than 7,000 families who are eligible for child-care assistance but on the waiting list because of inadequate funding.

In 2015, the Homes for All campaign will request an additional $39 million in the state budget to prevent homelessness and create housing.

“Housing is the foundation for stable families and strong communities,” stated Liz Kuoppala, Executive Director of the Minnesota Coalition for the Homeless and co-chair of Homes for All. “Despite a better economy, Minnesota still faces rising homelessness among families with children and tight rental markets. By investing in housing, lawmakers have the opportunity to make a substantial impact across the entire state.”

However, Minnesota Management & Budget Commissioner Jim Schowalter warned that inflation could eat up much of the projected surplus.

This article includes information from Session Daily, the publication of the Minnesota House.

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