SW Minnesota Today

Minnesota state Sen. Jason Rarick said that the $1.5 billion budget surplus projected by the Minnesota Management and Budget office (MMB) shows taxpayers have paid too much.

“It’s very clear that the 1.5 billion dollar surplus is a result of gross over-taxation,” Rarick said in a press release from the Minnesota Senate Republican Caucus.

Rarick said that the surplus is a sign of how well Minnesota businesses are doing.

“This month’s budget forecast is proof that the state is in great shape. The economy is at an all-time high and unemployment numbers continue to be low,” he said.

The Minnesota Management and Budget (MMB) office has predicted a $1.5 billion surplus for the 2020-2021 biennium, a $181 billion increase over November predictions.

The surplus and state of the economy makes giving money back a priority for the legislature, Rarick said. 

A tax plan announced last week by the Senate Republicans would provide full social security exemption and reduce the lowest income tax rate, according to the press release. The plan is also in conformity with section 179 for farmers and small business purchases.

The Republican Caucus noted the current projected surplus is one of the largest for Minnesota and the state reserve of $2.359 billion is considered “fully funded.” Contributing to that was a $96 million increase in projected revenue and a $91 million decrease in projected expenditures.

The MMB report states that state law will reduce the state reserve by $491 million in the next biennium.

The MMB report states that, "The economic outlook is stable but a slowdown remains in the forecast.”

The report also states that growth is expected to continue at a “moderate” pace of 2.1% through this year, but then fall to 1.5% in 2023.

Contributing to the projected slowdown in growth would be factors such as fiscal stimulus dissipating, uncertainty over tariffs and other policy, rising interest rates and a full-employment labor market.