Goggin: November budget forecast shows positive signs for Minnesota’s economy

On Tuesday, the office of Minnesota Management and Budget (MMB) released their annual November economic forecast. The report, which details the state’s budget picture, projected a deficit of $188 million for the current biennium.

According to a presentation by MMB Commissioner Myron Frans, the forecast is driven by lower-than-expected revenues based on assumptions about federal legislation and U.S. GDP and wage growth. The forecast assumes the U.S. Congress will not pass a tax relief bill, and it assumes 2.2% GDP growth in 2017 – this is despite growth of more than 3% the previous two quarters.

In addition, the forecast reflected $178 million in spending on the federal Children’s Health Insurance Program (CHIP), a gap that would be closed once the funding is appropriated at the federal level.

“We worked really hard this year to pass a responsible budget that benefits the people of Minnesota, and if you look closely at the November forecast, you’ll see the results of that,” said Sen. Mike Goggin (R-Red Wing). “Wages are projected to keep going up; our unemployment rate is very low; and Minnesota’s exports increased every quarter this year. The reason the forecast shows a small deficit is that it didn’t factor in two virtual certainties at the federal level – the passage of a tax reform bill, and the passage of funding for the Children’s Health Insurance Program. Rather than rush to judgment on this forecast, we should wait for the February forecast for a more accurate picture of our economic landscape.”

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