Deficit Gone: Minnesota Projects $641m Budget Surplus Through June

(AP Photo/Steve Karnowski)

So much for a giant deficit.

Minnesota budget officials said Tuesday they expect a $641 million surplus between now and June, reversing their earlier prediction of a $2.4 billion shortfall from the May report.

A $1.3 billion shortfall is likely for the two-year period that starts July 1, budget officials said. But that number is down from a $4.7 billion expected hole in the May report.

With the wild swing, calls will intensify on the Minnesota Legislature to use the short-term surplus to send large cash payments to struggling businesses as they deal with shutdown orders and an economic recession.

“The good news of this forecast means that the Legislature can take immediate steps to help stabilize small and medium-sized businesses and jumpstart economic recovery throughout the state,” Minnesota Chamber of Commerce president Doug Loon said in an email.

Minnesota budget officials are scheduled to brief reporters at an 11 a.m. news conference. Gov. Tim Walz and top Democratic and Republican legislative leaders are set to answer questions afterward.

Top lawmakers will be asked how close they are to a deal on economic relief. Walz said lawmakers had conversations over the weekend but did not indicate they were nearing an agreement.

The governor, a Democrat in his first term, has said he would call the divided Legislature back for a special session if there’s a deal.

Walz and House Democrats have put out the framework of their plan, while House Republicans have also released one. Both plans call for directing hundreds of millions of dollars to businesses affected by Walz’s closure orders, though they differ in how the relief would be delivered.

Walz’s plan also calls for a 13-week extension of unemployment benefits and an immediate $500 cash payment to roughly 31,000 low-income families.

“We are in a significantly stronger financial position than we thought we would be last spring,” House Majority Leader Ryan Winkler, DFL-Golden Valley, said after seeing the budget projections. “It’s time to support the front-line workers, families in need, and the small businesses hit hardest by COVID.”

Republicans who control the Senate have not released a proposal.

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