February Budget Forecast: Modest Growth to Surplus
The February budget forecast was announced this morning, and the projected surplus has grown slightly from the economic prediction made in November 2016. According to the office of Minnesota Management and Budget (MMB): “Minnesota’s economic outlook improves, but significant risk remains.” Minnesota’s state budget had a projected $1.4 billion surplus in November, and that has now grown to $1.65 billion. The majority caucuses will now determine what their budget targets will be in each committee area, before finally sculpting their comprehensive two-year state budget. A budget must be in place by July 2017 to avoid a state government shutdown.
The projected increase to the budget is due to positive economic data from the months since the November forecast, including improvements in personal income, business spending, employment and consumer spending. According to MMB, there is risk in predicting the state’s economic outlook due to the uncertainty of federal initiatives. Until it is clear what trade, health care and manufacturing proposals are advanced at the federal level there is some risk in assuming the permanence of an economic forecast.
Ewald Consulting will provide an in-depth analysis of the budget forecast in the Friday, March 3 edition of Ewald at the Capitol.