Finance officials release the latest state budget forecast Thursday — the first look at the budget since Gov. Mark Dayton and the GOP-controlled Legislature enacted a budget plan that delayed school aid and borrowed against future tobacco payments to erase a $5 billion deficit. Guests on Midday include MPR News reporter Tom Scheck, and two former speakers of the Minnesota House -- DFLer Margaret Anderson Kelliher and Republican Steve Sviggum.
RT @AP: BREAKING: Construction spending, manufacturing both up in positive signs for economy -ldh
Two people briefed on budget say there is a surplus of $876m in current budget cycle.
Several sources say $876 m will go to pay back state budget reserves. They also say state has budget deficit in the next cycle.
The news counters State Economist Tom Stinson's prediction in fall that says state would face a deficit.
Same thing. RT @NorthernMNer: @tomscheck Next cycle--next FY or next biennium?
RT @PoliticsMN: 1/2: By law, state's $876m surplus will first refill cash flow a/c, adding $255m to bring it to statutory $350m. #mnleg
RT @PoliticsMN: 2/2: The remaining $620m will go to budget reserve, which stands at $0 w/ a statutory target of $653m #mnleg
State forecast says economic outlook "has dimmed." Real GDP growth will avg 1.7% in '12 and '13 (down from expected 3.1%)
Forecast documents also say Minnesota's economy is likely to be better than the U.S. economy in '11 and '12.
The state is facing a budget deficit of $1.3 billion in the 2014-2015 budget cycle. That doesn't include K12 shift repayment.
State closed FY '11 with $526 m greater than forecast. Revenues also exceeded forecast by $358 m. Spending also decreased $348m
Lower HHS spending accounts for more than 80 percent of a forecast spending reduction of $205 million in FY '11 & $348m in FY '12-13.
State law requires all of the surplus to go to cash flow account ($255m) and state budget reserve ($621m).
Global Insights predicts an "increased risk of recession for the U.S. economy." Eurozone problem and Washington gridlock partly to blame.
Folks are asking me about whether the money can go to the stadium. Unlikely since everyone opposes using Gen Fund money for stadium.
The brighter economic prospects give lawmakers breathing room if they want to do a stadium bill.....
Tom Scheck will be on Midday at 11...along with two former speakers of the Minnesota House -- DFLer Margaret Anderson Kelliher and Republican Steve Sviggum.
But the brighter forecast (and redistricting) will also give the Legislature added incentive to end the session earlier than usual...
GOP Sen. Majority Leader Amy Koch "It shows that Republicans are going to leave the state budget in much better shape then they took it in."
The biggest factor as to why there's a surplus: Increased income tax collections were higher and decreased spending on HHS programs.
Global insight, which is the state's economic consultant, also says the probability of a recession is greater than normal.
Global Insight has raised its probability of a recession because of the Eurozone's financial problems have increased.
I'm on MPR's Midday for a bit at 11 to discuss the forecast. Former speakers Steve Sviggum & Margaret Anderson Kelliher on for the hour.
MPR's Scheck: Forecast creates breathing room for governor and lawmakers but cautions forecast for economic growth has been cut....forecasters saying it's still a long slog.
Sviggum: Absolutely zero connection between surplus announcement and proposals for a Vikings stadium. "Not even a thread between the two issues."
MMB Commissioner to start forecast newser: "Surprise!" Attributes it to his daughter.
MMB Commissioner Jim Schowalter says tax collections have been coming in "better than anticipated" at $358m.
State economist Tom Stinson. Economic outlook worse now than it was in February but there is not another recession in the forecast.
State Economist says extension of unemployment insurance and payroll tax cut is baked into forecast.
State Economist Tom Stinson says if Congress doesn't act on those provisions - it would be a cut of up to 1 percent in growth.
State economist Stinson: The Minnestoa economy is doing better than nationally, jobs and wages are growing faster than the US average; that's expected to continue through 2012.
State economist Stinson: "These forecasts are not guarantees. You may have already figured that out ."(reporters chuckle)