The Minnesota Office of Management and Budget (MMB) released the December budget forecast on December 6. The December forecast is one of two annual forecasts done to provide an update on Minnesota’s financial health by examining spending, predicted revenues and a variety of other economic factors. It shows projected deficit or surplus for the current biennium (FY 2020-2021) and gives a glimpse into what may be the forecasts for future biennium.
The December budget forecast is positive, showing a surplus of $1.54 billion. Overall, this is good news for Minnesota and good news for housing advocates. Many budget experts, however, urge a note of caution in reviewing the extent of the surplus. Speaker-designate Melissa Hortman said the “real surplus” was $382 million, as reported by Session Daily.
What are financial cautions when reviewing the budget? The forecast does not include inflation, the projected “ongoing” revenues are significantly reduced in future biennium, and the forecast does not account for many costly items of unfinished business from the last session, such as expiration of the provider tax. For more information review this editorial from the Star Tribune, blog from the Mn Budget Project, or the full report from MMB.
