Ewald at the Capitol | Historic State Budget Surplus

Historic $7.7 Billion State Surplus Projected

The Department of Minnesota Management and Budget announced today (Dec. 7) that the state has a $7.7 billion projected surplus. The $7.7 billion is in addition to roughly $1.2 billion in federal COVID-19 relief funds directed to Minnesota that have yet to be designated for a specific purpose.

it’s the largest budget surplus in Minnesota history. Much of the projected surplus is being attributed to strong growth in income, consumer spending, and corporate profits for Fiscal Year 2021. Also contributing to the surplus are slightly lower state spending estimates in education, health and human services and other areas.

The strong budget forecast also triggers a statutory allocation of funds to the state's budget reserve, officials noted, increasing the reserve balance to more than $2.6 billion. Minnesota statutes require some of the surplus to be allocated to replenish certain state accounts such as $870 million for the state’s budget reserve (“Rainy Day Fund”) and $111 million for the U.S. Bank Stadium Reserve fund.

With the Minnesota Legislature set to reconvene on Jan. 31, 2022, expect to hear plenty of debate over how to spend the new funds and/or cut taxes.

They Said It...

“I'm proud of our work to protect lives and the economy here in Minnesota. Our historic surplus gives us an opportunity to lower costs for Minnesotans, invest in the middle class, and lend a hand to those who haven't recovered from COVID. Let’s keep Minnesota moving forward!” – Gov. Tim Walz

“The budget surplus gives our state a lot of options to make the lives of Minnesotans more affordable. With inflation, increasing energy prices, and continued economic hardship, it’s more important than ever for us to partner together to make sure families have the resources they need to thrive. We can also provide our small businesses the economic support to grow and create good-paying jobs. The top priority of Senate Republicans this session will be to provide additional tax relief to Minnesotans across the state.” – Senate Majority Leader Jeremy Miller (R-Winona)