State economists project $876M surplus

The money will be used to replenish the state’s cash-flow accounts and reserves for 2012-13 fiscal cycle.

Ian Taylor

The state economists project an $876 million surplus to the general fund according to a state forecast for the two-year budget cycle. The fiscal year balance for 2011 came in higher than expected by $526 million. Add to that an additional $205 million that the state didnâÄôt spend this year and the forecast for the 2012-13 biennium is the first state budget surplus since 2007. With the state in debt and recovering from a grueling shutdown, the surplus comes as a surprise. Although the state has more money to use than expected, according to Minnesota Management BudgetâÄôs November forecast for 2011, state law dedicates the money to first replenish the cash-flow account and budget reserves. The forecast budget adds $255 million to fill the cash-flow account that maxes out at $350 million. The remaining $621 million was allotted to the state budget reserve. These functions engulf the entire surplus. State officials caution that although the surplus is good, the state should be careful with its monetary future. âÄúWhile we made progress âĦ we still have challenges and work to go ahead,âÄù said James Schowalter, the commissioner of Minnesota Management and Budget, at a press conference Thursday. âÄúWe want to make sure we have some stability, we want to restore the fiscal stability of the state.âÄù State Economist Tom Stinson explained the current status of MinnesotaâÄôs economy at the conference. âÄúSince the recovery began, Minnesota has regained a third of jobs lost,âÄù he said. While acknowledging that âÄúthere are still plenty of risks out there,âÄù Stinson also said the stateâÄôs economy is doing better than the nation and that progress is expected to continue into 2012.