CHICAGO — Minnesota closed fiscal 2013 with a $636 million surplus that will help repay school district aid withheld to deal with a prior budget deficit, according to preliminary budget results.

The state will still owe districts about $200 million of the $2.8 billion in state aid withheld to help balance the state's fiscal 2012-2013 biennial budget, according to a statement from Gov. Mark Dayton.

"Last spring, the DFL [Democrat-Farmer-Labor ] legislature and I passed the first responsible state budget in more than a decade," Dayton said in a statement. "This additional repayment of the state's debt to our schools marks another step toward a clean fiscal slate, from which we will build a better Minnesota."

The state has slowly been repaying the districts for aid withheld with improving revenues. Minnesota Management and Budget said preliminary results show the state ended the last fiscal year June 30 with $636 million more than projected in the last formal revenue forecast issued in February.

Higher than anticipated year-end revenues, combined with gains in transfers and other resources along with lower spending, produces the $636 million balance, a report from MMB said. Under state law, the entire balance automatically goes to repay a portion of the estimated $874 million in aid still owed to public school districts.

The state's economic picture has brightened. The new revenues end a reliance on non-recurring items to balance the budget. The promise of new revenue from a tax package approved this spring in the new $38.3 billion two-year budget further enhances its position.

A new personal income tax bracket with a rate of 9.85%, up from 7.85%, is projected to raise $1.1 billion during the fiscal 2014/2015 biennium. Corporate tax changes and the tobacco tax hike will generate another $850 million. The new revenue will wipe out a $627 million deficit and pay for more spending on education, economic development, and fund property tax relief.

The state carries general obligation ratings in the high-double-A category.

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