Minnesota’s state surplus forecast has dropped from $1.2 billion to $900 million, state budget officials announced Friday.
Slowed tax revenues, a weakened national economy and China’s economic impact on the iron ore industry all contributed to the forecasted $427 million drop, according to the Minnesota House of Representatives’ Session Daily.
Gov. Mark Dayton said he will continue to prioritize increasing investment in early education. But the new forecast is “a wake-up call for all of us,” he said, according to the Session Daily. He will present a revised supplemental budget proposal on March 15.
As the legislative session approaches, some representatives said they plan to continue advocating for their proposed bills.
Rep. Jon Applebaum, DFL-Minnetonka, said he will push for a bill that would use the surplus to offer tax relief to people paying for student loans.
“Addressing higher education affordability and student loan debt … is a priority, regardless of how much money is in the surplus,” Applebaum said.
House Speaker Kurt Daudt, R-Crown, said his party’s main focuses for the upcoming legislative session are tax relief for the middle class and investing money into the road and bridge infrastructure.
“We just need to be a little more cautious,” Daudt said in response to Friday’s announcement. “We need to do things that will spur economic growth.”
In past years, economists regularly adjust the budget surplus forecast as they learn new information, said state economist Laura Kalambokidis.
Each 32-month biennium provides six opportunities to announce the forecast, Kalambokidis said, and there are two more forecasts left for this biennium.