The trend of wild swings in recent budget forecasts continued last week with Minnesota Management and Budget’s release of the February Forecast. The state’s financial picture has improved significantly since the last projection in November, having gone from a projected $1.3 billion deficit in the upcoming biennium to a $1.6 billion surplus.
This is welcomed news and should help ease the tensions of end-of-session budget negotiations with the need for deep cuts no longer urgent.
Governor Walz’s original budget recommendations – based off of the November forecast predicting a deficit – called for increased taxes, tapping into the state’s budget reserves, and some reductions to state agencies (including to both the Minnesota Investment Fund and the Job Creation Fund at DEED). With this updated budget forecast we expect Governor Walz to release supplemental budget recommendations to reflect the new reality. Governor Walz did not immediately take his proposed tax increases off the table, but early indications are that the need for cuts to state agencies will no longer be as pressing.
With the first deadline for bills to be heard in Committee quickly approaching on March 12th, the legislative calendar is full of action in both chambers this week. EDAM supported H.F. 819 (MIF, JCF, and Redevelopment funding) will be heard in the House Workforce and Business Development Finance and Policy Committee on Wednesday March 3rd.
We anticipate the companion bill in the Senate to be heard later in March and will continue to work with the bill authors and Committee staff as the bills make their way through the Committee process to ensure funding for these key programs.