Beyond the Headlines: Insights on Minnesota’s Economy and Budget from the November Forecast
Minnesota budget officials project the state’s coffers will collect a $1.1 billion surplus during the current budget period. Understandably, the takeaway revolves around whether the state budget is in deficit or surplus. Yet, there’s much more to learn from the forecast. Yes, Minnesota’s economy is doing well relative to other states, but the forecast reminds us that Minnesota does not consistently outperform the country. Yes, Minnesota continues to boast one of the lowest unemployment rates and highest workforce participation rates in the country, but discouraged workers leaving the labor force appear to be chipping away at this advantage. And yes, the state budget is in surplus, but future revenues will be more volatile and health care spending growth continues to pose serious challenges. All of these points suggest lawmakers need to be careful in handling the $1.1 billion surplus.