Minnesota will have about a $1 billion surplus for the 2016-17 biennial budget, according to a forecast released Thursday by the Minnesota Management and Budget office. The report also predicted a $373 million surplus for the upcoming 2014-15 biennium.
The surplus, which doesn’t account for inflation, is the result of an increase in tax revenues and a drop in spending, said MMB Legislative and Communications Director John Pollard.
University of Minnesota Associate Director of State Relations Todd Iverson said that because the budget projection doesn’t factor in inflation, it could be deceiving.
“It’s a lot better situation than having a deficit, but it’s definitely not as big as the number makes it sound,” Iverson said.
Pollard said the MMB uses figures of state revenues and spending needs to provide Gov. Mark Dayton the forecast as he readies his 2015 state budget proposal.
In January, the governor will send his budget proposal to the state Legislature for approval.
Dayton said in a statement Thursday that Minnesota’s low unemployment rate of 3.9 percent stemmed partly from the state’s support of higher education.
“This is certainly good news for Minnesota,” University President Eric Kaler said in a statement Thursday. “We look forward to working with the Governor and Legislature to advance the University’s partnership with the state.”
Kaler said the “state’s recent reinvestment in higher education” through a tuition freeze and research investments has benefited University families.
In October, the University’s Board of Regents approved a request for an additional $77 million in state funds.
Iverson said that if lawmakers fully approve that request, the institution would return to its 2008 level of funding.
“Almost a decade later, we will be back to where we were, and we think that’s a compelling argument to invest in the University,” he said. “I don’t think the University has ever received its full request, but we’re going to make as hard an argument as we can make … and see where we end up.”
Because it met all legislative performance goals set for the current fiscal year, the University will receive $26.5 million in state dollars for the 2015 fiscal year, it announced Friday.