Minnesota’s $1.5 billion budget surplus, predicted back in November, is fading fast. The state’s latest economic forecast is now saying the surplus in the state budget will be just $1 billion at the end of the biennium. A slowing economy and lower than expected tax revenues are draining the state’s dollars before the government even has a chance to spend it.
Gov. Tim Walz had proposed an 8 percent increase in state government spending, based on the November forecast. He is unfazed by the dwindling surplus.
“This forecast validates the approach we proposed in our budget,” Walz said. “Our budget looks to the future, and that’s exactly what you need to do when facing slower economic growth. We must make investments that continue economic growth, and my investments in education, health care, and community prosperity will do just that.”
In other words, as the economy slows down, the state’s spending should speed up. If economic growth won’t cover the cost, we suppose increased taxes will be required.
That’s not a fiscal policy we can support.
Instead, we hope budget writers at the Capitol will look to look to find ways to make the needed investments in education, health care et al, but will also look for ways to lower non-essential costs, use money more efficiently and cut waste and fraud.