Senator Carla Nelson [R-Rochester] touted Minnesota’s strong economy and historically low unemployment rate following Minnesota Management and Budget’s release of the state’s November budget forecast. While the forecast projects a $188 million deficit, the prediction fails to account for the upcoming federal tax bill, estimates $178 million in state spending on the federal Children’s Health Insurance Program (CHIP), nearly all of which would be backfilled once CHIP is renewed at the federal level, and assumes 2.2% GDP growth in 2017, despite 3.1% growth in the second quarter and 3.3% growth in the third quarter. Because of these and other variables, the legislature will look to the updated February budget forecast before making any policy decisions.
“The November budget forecast shows that Minnesota is moving in the right direction and our economy is growing,” said Senator Nelson. “Our state’s unemployment rate is lower than the national average, our growth of exports is outpacing national trends, and state wage growth is projected to increase from 2.8% in 2016 to 4.7% in 2018. When we account for federal tax reform, our state’s budget will be right on track come February. Coincidentally, that will be when Minnesotans will start to see the benefits of state tax reform we passed during the 2017 legislative session.”
In addition to a growing economy, Minnesota has nearly $2 billion dollars in budget reserves. In February, Minnesota Management and Budget will release a revised budget forecast with updated data.
Added Senator Nelson, “All in all, Minnesota looks to have a healthy, robust, and growing economy.”