A Republican state senator recently suggested using Minnesota’s estimated budget surplus of $1.3 billion to give a rebate “directly to taxpayers.”
State Sen. John Jasinski (R-Faribault) offered a number of suggestions for how to return the surplus to state taxpayers in an editorial published to the Senate Republican Caucus’ website Friday.
Minnesota Management and Budget (MMB) released an economic forecast in November that predicts Minnesota will have a budget surplus of $1.3 billion for the 2020-21 biennium. MMB said a small decrease to estimated spending and an improved revenue forecast have created an estimated surplus of $1.332 billion. Specifically, officials estimated a $493 million increase in income tax revenue over the previous forecast, a $252 million increase in general sales tax revenue, and a $294 million decrease in corporate tax revenue.
The forecast is the first of two reports lawmakers will use to guide their budgeting decisions during the 2020 session. A previous forecast had projected a $1.05 billion surplus for the current biennium, which runs through June 2021.
Budget officials said an extra $284 million has been added to the state’s budget reserve, which now has an account balance of $2.36 billion.
“This forecast is an indication of Minnesota’s strong economic fundamentals,” MMB Commissioner Myron Frans said.
Jasinski said this all “adds up to another pretty significant budget surplus.”
“It’s your money, so my top priority would be to return it to taxpayers. There are a lot of ideas about how to do that,” he said, suggesting a taxpayer rebate like the “Jesse Checks” issued under former Gov. Jesse Ventura.
Other ideas included income tax reductions for low-income and middle-income families, license tab fee reductions, and targeted tax credits “for those who need it most,” like seniors, farmers, students, and working families.
“After past budget surplus announcements, I often heard from constituents that they wanted us to save for a rainy day,” Jasinski continued. “This is reasonable: you never quite know when the next recession might hit, and it is important to be prepared – just like you would with your family budget. But I’m proud to say that due to Republicans’ smart budgeting these last few years, the rainy day fund is literally maxed out.”
Jasinski does not think the surplus should be put towards education, since “Minnesota has invested more into public education than ever before” in the last four years.
“Our current education budget sits at $20 billion, and for each of the last four years we have provided 2 percent annual increases to the per pupil formula – a record,” he said.
A November statement from Senate Majority Leader Paul Gazelka (R-Nisswa) indicates that he agrees with Jasinski’s assessment.
“The savings account is full, and it’s time to give it back,” said Gazelka. “This surplus needs to be approached with fiscal responsibility and accountability to the taxpayer—this is their money after all.”
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