Minnesota Management and Budget (MMB) released the 2017 November Budget and Economic Forecast. Projections show a deficit of $188 million for the current biennium, and a projected negative balance of $586 million for the 2020-21 biennium. Deficits are due to a reduced U.S. economic growth forecast and impacts of legislation enacted during the 2017 session. The forecast does not account for forthcoming changes from the federal tax bill. Unknowns in federal policy and the current economic expansion, one of the longest in U.S. history, create significant uncertainty for this forecast.
Spending is estimated to be $398 million higher than at the end of session largely due to a higher forecast for special education spending, along with unspent appropriations from FY 2017 that are projected to be spent in FY 2018. Partially offsetting lower revenue growth and higher spending is $625 million in increased resources available from a positive closing balance in FY 2017. Reserve balances are $20 million higher due to statutory allocations. Supporting documents are available on the MMB website.
Governor Mark Dayton said he would not release a supplemental budget recommendation until March, after the February forecast is released from MMB.
Special Election Date Set
There will be a special election held on Monday, February 12, 2018, for two seats. Senator Dan Schoen (DFL-St. Paul Park) and Representative Tony Cornish (R-Vernon Center) both resigned amid sexual harassment allegations. Candidates have stepped forward in both races to fill the vacancy. We can expect the senate race to garner a lot of attention and outside money, as the Senate Republican currently have a one seat majority, 34-33.