The State of Minnesota’s Economy: 2020
In our recent report “Closing Minnesota’s Budget Deficit: Why we should make spending cuts and not raise taxes,” we noted that, looking at the data for our state, it seems that the dollar amount of tax revenue available to the government is far more likely to be a function of the size of the state’s economy than of the level of its tax rates. This means that if you want more money to fund government services, you should look to increase the state’s Gross Domestic Product (GDP) rather than hike its tax rates.1
This report looks at how we can foster that stronger economic growth in Minnesota. This report looks at the period from 2000 to 2019, except where data availability requires us to use some other date. This gives us a good span of time to look at longer-term trends and changes in Minnesota’s economy. It also means that our data covers two periods of economic downturn and recovery, as dated by the National Bureau of Economic Research.2 In most cases, the most recent data in this report is from 2019. In early 2020, the COVID-19 pandemic hit Minnesota and the federal and state government took various steps to combat it, with significant economic impacts. This report reflects the economic situation in our state on the eve of the pandemic.