State budget surplus of $1.9 billion predicted
It’s been a long time since the state of Minnesota has had a rosy financial picture. But last week, economic forecasters were anticipating a $1.9 billion surplus for the state.
Within minutes of that announcement, our email inbox was flooded with opinions from a wide variety of groups, all clamoring for a substantial slice of the surplus pie — transportation, education, aid to cities — were just a few of the ideas thrown out to spend the surplus.
And, of course, there is the perennial proposal to refund some of it to the taxpayers who paid it in the first place.
First and foremost, we need to build up a rainy day fund for the next time the economy goes sour — and we all know that is as inevitable as death and taxes.
Fortunately, the 2014 Legislature made the wise decision to place a third of any budget surpluses into the state’s reserve fund. That means $594 million of the surplus will automatically be socked away as a hedge against future economic downturns.
Since we cannot count on continued budget surpluses in the future, it would be best to spend the remainder of the surplus on one-time expenditures such as infrastructure. A billion dollars could go along way in improving our badly neglected roads and bridges.
As the Legislature considers what to do with its surplus, we encourage it to proceed with caution and look for the best, long-term investments, which will serve the state for decades to come.