Minnesota’s record $9.3 billion projected budget surplus is being driven in large part by the increased earnings of its residents and corporations.
Projected state revenue of all kinds has grown by roughly $6.4 billion since last summer when the Minnesota Legislature approved the current two-year $52 billion budget, according to state data released Monday. And the state entered the biennium with a healthy savings account of more than $2.6 billion.
The anticipated surplus described Monday includes about $3.4 billion in added income taxes and $1.3 billion more in corporate taxes compared with past projections. Sales tax collections also should grow by more than $1 billion over expectations.
Just a few months ago, the Department of Management and Budget was projecting a total budget surplus of $7.7 billion.
Meanwhile, state spending projections have declined by roughly 1.2 percent below summer budget estimates. That was driven largely by reduced spending on public schools, health and human service programs and smaller debt payments.
Anticipated spending on preschool through high school is down $484 million while HHS costs could fall by $202 million. All other spending in the budget is running just above expectations.
This isn’t the first time Minnesota had a rosy budget outlook. The state has posted nine years of budget surpluses. The latest projection of a $9.3 billion surplus is a modern record and nothing in recent history comes even close — one year ago, a $1.6 billion surplus was projected.