SAINT PAUL — (February 29, 2012) — Speaker of the Minnesota House Kurt Zellers today said good fiscal management by Republicans in the Minnesota Legislature has turned the state’s bleak economic outlook from one year ago into positive news.
“In one year our state went from a $6.1 billion deficit to a $1.2 billion surplus. The Republican plan is working,” said Speaker of the House Kurt Zellers. “The state’s revenue growth is not attributable to new taxes, but to a recovering economy that allows hard-working jobs creators and families to succeed.”
According to Minnesota Management and Budget, Minnesota’s financial outlook has improved slightly since November with forecast revenues up $33.8 billion, which is up $93 million from November estimates. Forecast state government spending is projected to be down $528 million from previous estimates. These changes result in an additional $323 million to the state’s budget. When combined with the $876 million surplus in November, the state of Minnesota now has a $1.2 billion surplus.
Zellers credited stronger than expected revenue growth, reduced state spending and low unemployment rate combined with private sector economic growth for the state’s additional revenue. He added that had Republicans not restrained state spending, government spending would be increasing at a rate far higher than even a strong economy can support.
“The February forecast confirms what we saw in November. This is a positive trend that Republicans remain committed to continuing. Investment and private sector jobs must be welcomed, not chased away by excessive taxes, regulations and burdensome government bureaucracy,” Zellers said.
The surplus means the state’s budget picture has changed dramatically from when the Legislature convened one year ago. At that time, the state faced a $6.1 billion deficit with no budget reserve and no cash flow account to ward against short-term borrowing. Today, the $1.2 billion surplus means the reserve and cash flow account will be fully restored with enough left over to begin repaying the additional 10-percent school shift that resulted from the budget agreement.
“Republicans and Democrats agree repayment of the shift is a top priority. We were thrilled a strong private sector economy is providing the resources necessary to pay the additional 10 percent that resulted from the budget agreement. We remain committed to paying back that percentage and then tackling the 70/30 shift as agreed to by the Democrats when they controlled the Minnesota Legislature,” Zellers said.
Zellers said he was disappointed Governor Mark Dayton and the DFL continue to push for tax increases.
“Job-killing tax increases to fuel unchecked government growth is a bad idea. Minnesota ranks 39th in tax burden for existing businesses and 35th for new businesses. We need to spend less time talking about raising taxes and more time creating economic opportunity,” Zellers said. “The Reform 2.0 agenda being worked on at the State Capitol will restore confidence in our economy to grow businesses and create jobs, improve education and reform government services to make them more effective to the people government serves and cost-efficient to the taxpayers who pay for it.”