Letter: Governor should heed state's economic news
Minnesota's latest economic update provided mostly good news, as budget experts again project better than expected revenue collections for the current and future budget cycles.
The overall report wasn't as robust as I was optimistic for, but it still highlights the positive growth. The last legislative session saw prioritized spending that forced government to live within its means two years ago, and we continue to see positive results from these responsible decisions.
For the current budget cycle that ends this summer, Minnesota is projected to collect $295 million more than anticipated. Current law directs $290 million to buy back the K-12 school shifts, leaving a balance of $801 million to our schools. The other $5 million will be put toward the state's budget reserve, bringing that balance to $649 million.
The projected deficit for the 2014-15 budget cycle has also made a dramatic turnaround. Projected at $4.4 billion just two years ago, that shortfall now stands at $627 million -- less than what is in the state's rainy day reserves.
A current concern is the impact of sequestration. Minnesota's direct exposure to federal cuts under sequestration is among the lowest of all states, though state economists believe any impact could be felt more in agricultural communities. They also estimate that federal sequester cuts would reduce Minnesota employment growth by no more than 5,000 jobs by the end of 2013. Forecasters note that while these cuts are unlikely to produce a recession by themselves, the economy would be left with little cushion against further shocks.
I'm pleased to see that during the 2016-17 biennium, Minnesota will see a $782 million budget surplus if state spending and tax rates remain in check. Over the past two years, 52,000 jobs were created and helped improve Minnesota's economy by forcing government to live within its means. Clearly the plan is working, and I'm hopeful this latest economic news will give pause to Governor Dayton and the legislative majority on their plans to raise taxes and state spending and instead focus their efforts on creating jobs for Minnesotans.