The growing budget surplus is our second chance to cut taxes in Minnesota
In a recent update, Minnesota Management and Budget announced that Minnesota’s budget surplus for the 2022-23 biennium jumped $820 million, up from the $1.6 billion estimated at the end of the session in May. This is in part due to higher-than-estimated tax revenues.
In particular, tax revenues in the 2023 fiscal year surpassed end-of-session estimates by $739 million. Spending was down $81 million, bringing the total variance to $820 million.
Additionally, MMB announced that revenues collected in the first quarter of the 2024 fiscal year (July to September 2023) are also up from their February forecast. Specifically,
Minnesota’s net general fund receipts for the first quarter of FY 2024 are now estimated to total $6.385 billion, $ 400 million (6.7 percent) more than forecast in the February 2023 Budget and Economic Forecast. Net receipts exceeded the projection for all major tax types.
Assuming tax collections in the last three months of the year keep up with the forecast, Minnesota will have at least an extra $2.8 billion at the beginning of the next legislative session.
Give it back!
In this year’s legislative session, Minnesota lawmakers had a golden opportunity to cut taxes with the state’s $18 billion surplus. Instead, they raised taxes by $9 billion. While over half of all states have lowered their taxes since 2021, we remain one of the most heavily taxed states in the country. In fact, a report published by the Tax Foundation ranked us number 44 in the country for our tax climate — and that’s without considering tax hikes that were enacted this year.
The state’s surplus is a second chance for our lawmakers to cut taxes and make Minnesota more competitive. At American Experiment, our message remains the same as it was in 2022 and earlier this year. Minnesota’s surplus belongs to taxpayers. It should not be spent, but be given back.