Minnesota Legislative Update: Budget Forecast

With the 2017 Minnesota Legislative Session approaching, we wanted to send a quick update on the recent budget and economic forecast. 

Budget Forecast

On Friday, December 2, Minnesota Management and Budget (MMB) released its most recent budget and economic forecast. For FY2016-17, the current biennium, the surplus is projected to be $1.012 billion. After the allocation of one-third ($334 million) to the state’s budget reserve — a requirement of state law — FY2016-17 is projected to end with a $678 million balance.

MMB projects a $1.4 billion surplus for the FY2018-19 biennium. This is lower than previous estimates due to slower revenue growth. MMB also commented that there is uncertainty in this forecast given the possibility of significant changes proposed by the Trump administration.

Today, the House Ways and Means committee met to discuss the forecast.

Governor Dayton and his staff will use the November forecast to make final decisions on his FY2018-2019 budget recommendations. These recommendations will be released to the Legislature and the public on January 24, 2017.

MMB will release its next budget and economic forecast in late February. It will be the basis that the Legislature will use in adopting a budget for the FY2018-19 biennium.

Special Session Possible

There continues to be talk about a special session in December. Legislative leaders and the Governor are trying to reach agreement regarding MNsure, the Tax bill and Bonding bill.