Another Budget Surplus

The February state budget forecast was released this morning and it illustrates how the reported surplus of $876 million last November has been EXPANDED by another $323 million. 

In just one year, new leadership in the Legislature has taken Minnesota from a $5.1 billion budget shortfall to $1.2 billion in surplus funds. The budget we passed in 2011 helped us change our economic fortunes by limiting government growth, providing long-term spending restraint and creating opportunities for private-sector job growth.

Our $6.3 billion turnaround in just one year underscores the fact Minnesota had a spending problem, not a revenue problem as some asserted. It really is Economics 101: State spending was on pace to grow 180 percent in a little more than a decade, a trend line that simply is unsustainable. Our state budget was set to jump another 22 percent this biennium, but the new Legislature reeled that in to a more affordable 6 percent last year.

Along the way, Minnesota’s unemployment rate has shrunk to 5.7-percent, far below the 8.5-percent national average. Minnesota's unemployment rate is falling faster than the national average, another real sign we are in better shape than most states. This job growth may have been stonewalled had we raised taxes by billions as some proposed last year.

As a public-school teacher, I am ecstatic the vast majority of our current surplus funds – at least $318 million – will be applied to paying back delayed K-12 education funding. The Constitution required November's round of surplus funds be used for replenishing state reserves drained during a string of budget shortfalls. Now, we can turn our attention to repaying schools. This is tremendous news and, while a balance will remain, it is good to know we are making a dent in repayment. 

I am motivated to continue working toward a situation where the K-12 shift can be moved back not only to the 70/30 fraction that it was when I came to office, but a plan in place to move it all the way back to 90/10 and lock it down so future legislators and governors cannot use it as a one-time fix. 

Our work is far from finished in putting us on a better fiscal course. We must remain committed to seeing reform initiatives to the finish line this session to help maximize the efficiency of our existing tax dollars. Two consecutive budget surpluses should provide all the incentive in the world for us to stay on task, continue positioning Minnesota to meet the demands of today’s economy and weather the challenges tomorrow may throw our way.