Statement from Governor Dayton on the February Budget Forecast
February 28, 2014
Today, Governor Mark Dayton released the following statement regarding Minnesota’s February Budget Forecast:
"Today’s State Budget Forecast is great news for Minnesota. It also is a dramatic improvement over previous forecasts. It is the first February Forecast in seven years to project surpluses for both the current biennium (FY14/15) and the next one (FY16/17). It projects an operating surplus of $1.2 billion in the current biennium and an additional $2.6 billion surplus for the next biennium. In addition, we have paid back all of the $2.8 billion borrowed from our schools.
By contrast, shortly after I took office three years ago, the February 2011 Forecast projected a $5 billion deficit for the next biennium (FY12/13).
This remarkable turnaround resulted from significant improvements in Minnesota’s economy. Contrary to some people’s mythology, the budget surpluses forecast for this biennium and the next DID NOT result from last year’s tax bill. Those surpluses DID result from thousands more Minnesotans working and earning higher incomes. According to this Report, Minnesota employers added 3500 jobs per month in 2012 and 3800 jobs per month in 2013. The Forecast also projects that Minnesotans’ total incomes will grow by 5.7% in 2014 and another 5.8% in 2015.
There will be time next fall to argue over who deserves what credit for these exceptional improvements. I believe the credit belongs principally to the people of Minnesota. To our businessmen and women, who have added over 133,000 jobs during the past three years. To their hard-working, productive employees, who made those new investments successful. And to the teachers, health care providers, law enforcement personnel, and state and local government employees, who make Minnesota a great place in which to live, work, and raise a family.
Our actions here in St. Paul have also aided our state’s economic recovery and improved many people’s lives during the past three years. We raised state income taxes on only our very wealthiest citizens, the top two percent. We used part of that revenue to stop the large annual increases in property taxes for all Minnesotans. We invested most of the rest in better education. Early childhood education, all-day kindergarten, per-pupil aid increases, and tuition freezes at MnSCU and U of M campuses will all contribute to a better Minnesota for decades to come.
We also invested in more jobs and better jobs. Three state bonding bills, while less than I had recommended, took advantage of low interest rates to fund hundreds of construction projects, which are improving higher education campuses, state parks, highways, and flood control projects, while providing thousands of jobs for unemployed workers. Additionally, we made smart economic development investments that have encouraged major business expansions by 3M, Mayo Clinic, AGCO, Shutterfly, Magnetation, Price Mechanical, Viracon, Olympus and many others, which are creating many thousands of new jobs. They are some of the reasons why the Gallup Job Creation Index ranked Minnesota fifth best among the fifty states for job creation in 2013.
We have thus proven that there is a positive role for government to play in our state’s economic progress. Now, we have the responsibility, and the opportunity, to extend our contribution to our state’s continuing improvement, by deciding how best to allocate this biennium’s $1.2 billion surplus. The individual and business tax cuts in the House tax bill are a very good start.
I will be providing my supplemental budget proposals next week. I then look forward to working with the Legislature in the best interests of Minnesota. "