Minnesota legislators received an unwelcome surprise last week when they learned the state’s budget surplus is now projected to be about $300 million less than previously expected. Although the new estimate of a $900 million surplus is still impressive, it signifies tough choices ahead as legislators debate how best to spend the money.
Gov. Mark Dayton intends to release his spending recommendations by mid-March. It seems likely he will continue to push for a statewide free preschool initiative.
Republicans following House Speaker Kurt Daudt, however, would prefer to invest the surplus in road construction. Other Republicans continue to argue the state should return its surplus through tax cuts.
Minnesota’s uncertain economic future further complicates matters. Senate Majority leader Tom Bakk, DFL-Cook, said the state’s habit of promoting financial aid for local governments will face challenges over the coming years, and budget commissioner Myron Frans urged legislators to consider the difference between short- and long-term investment projects.
As a safeguard against economic downturn, we encourage legislators to invest a portion of the surplus in Minnesota’s rainy day fund. This fund helps to finance health care and education projects in times of recession, and it can also boost the state’s credit rating.
Apart from that, Minnesota should take advantage of its surplus to address problems in racial disparities, transportation infrastructure and rural broadband coverage.
News of a smaller surplus shouldn’t overshadow news of a surplus — we should feel proud that Minnesota’s biggest question is what to do with its extra money.