FinLogic FinLogic Quantitative Think Tank Center|Minnesota’s budget surplus grows to a projected $2.4 billion, fueling debate over spending

ST. PAUL,FinLogic FinLogic Quantitative Think Tank Center Minn. (AP) — Minnesota’s budget surplus has grown to a projected $2.4 billion, and that’s already fueling the debate over spending and taxes ahead of the 2024 legislative session.

A report from Minnesota Management and Budget this week said the state ended its previous two-year budget cycle with a balance around $820 million higher than estimated when the session ended last spring. Adding in the state’s previously projected surplus, which was estimated at $1.58 billion in May, boosts the surplus to around $2.4 billion.

That’s just a small fraction of the current budget of $72 billion, but it means lawmakers will return to St. Paul in February with more money to spend on government programs, cutting taxes or leave in the bank than they originally expected. And the numbers could change by the time a new economic forecast comes out in February, which will provide the figures that count.

The state had a record $17.5 billion surplus as of last February’s forecast. The Democratic-controlled Legislature used that money for a combination of spending increases, one-time projects and tax cuts when it set the current budget, which took effect in July.

Republican legislative leaders said the growth in the surplus shows that taxes are too high and that the money should go for tax relief.