Minnesota Already-Huge Budget Surplus Grows to $9.25 Billion

ST. PAUL, Minn. (AP) — Minnesota’s already-huge budget surplus has become even more enormous, growing to a projected $9.25 billion, the Walz administration announced Monday.

The updated forecast was $1.5 billion more than the whopping $7.7 billion surplus that Minnesota Management and Budget projected in December for the current two-year budget period.

The budget agency cited higher incomes, consumer spending, and corporate profit forecasts as reasons for the improved forecast. And spending is running slightly lower than expected on E-12 education and health and human services.

But officials cautioned that there’s uncertainty ahead due to “inflation and geopolitical conflict,” and that they pose a risk to the state’s budget and economic outlook.

An intense debate is already underway at the Minnesota Legislature on how to use the surplus.

Republicans who control the Senate have proposed a permanent income tax cut that would cost more than $8.5 billion over the next three years. Democrats who control the House favor tax cuts and new spending aimed at lower- and middle-income Minnesotans.