CHICAGO Minnesota’s latest revenue forecast added another $800 million to a projected surplus, more than doubling the extra revenue expected in the current biennial.
“Minnesota’s good economic news continues,” Gov. Mark Dayton said Friday when the annual February forecast was released. “I propose that we invest our collective good fortune in our collective better future.”
Dayton, a member of the state’s Democrat-Farmer-Labor Party, has proposed new transportation and education spending. He will release a revised budget proposal that addresses the new surplus on March 9.
Minnesota now expects a total of $1.87 billion more in revenue for use in fiscal 2016 and 2017 than was anticipated before the November and February forecasts. The number is up $616 million, or 1.5%, over what was forecast in November. Spending is expected to drop by $115 million and $107 million was added to the opening balance expected when the fiscal biennium begins July 1. Those changes drove up the roughly $1 billion November forecast by another $832 million.
The increased revenues are mostly from income taxes and sales taxes and are due to an economy that continues to improve, according to the report from state economist Laura Kalambokidis.
Dayton earlier this year proposed a $42 billion, two-year budget proposal that would use the state's then $1 billion surplus to increase education spending.
The budget is up from a $39.4 billion plan that covered fiscal 2014 and fiscal 2015 which closes June 30. Republicans control the state House and the DFL controls the Senate.
Republicans are expected to press for the use of the surplus to lower taxes.
The budget's release followed Dayton's announcement of an $11 billion, 10-year transportation package that would rely on raising Minnesota's wholesale gas tax, vehicle registration fees, and a regional sales tax to generate $11 billion to maintain and improve the state's highways, bridges, and public transit systems.
Ahead of Minnesota's last new money sale in the summer, Fitch Ratings affirmed the state's AA-plus rating, Moody's Investors Service affirmed its Aa1, and Standard & Poor's affirmed its AA-plus. All assign a stable outlook. The ratings impact $6 billion of GO debt.