The Minnesota State Legislature will be starting out the New Year with a projected $1.4 billion budget surplus.
The news of this large amount of surplus money was released by Minnesota budget officials early Friday morning and was larger than expected, according to KSTP News.
Where did that money come from? Nearly $730 million came from money left unspent in 2016 from halted tax and transportation bills.
When the new session starts, the Republicans, who are in control, and Governor Mark Dayton will set a two-year budget. Republicans want any extra money to go to tax cuts and credits, while Dayton wants to be more cautious with the surplus, claiming federal uncertainty and signs of a slowing economy.
Dayton says that the surplus indicates that Minnesota is financially solid after several decades of deficits. When Dayton first took office in 2011, there was more than a $6 billion budget shortfall. The governor has no specific goals for spending the surplus, but will be proposing his own budget in January 2017.
Dayton said in a statement, “To put this report in context, six years ago, at the November forecast with which I took office, the projection was for a $6.2 billion deficit in the next biennium. We owed $2 billion to the schools, and there were numerous other shifts and gimmicks woven into the budget. Now, we have a projection of a $1.4 billion surplus for the next biennium, we owe nothing to the schools, $1.9 billion is parked in the budget reserve fund, and it’s just a remarkable change from chronic deficits to a secure budget, fiscal integrity for the state, honest budgeting, and the like.”
The surplus size will be updated when the state budget is finalized in February.