Minnesota’s latest state revenue forecast on Thursday had encouraging news for Governor Mark Dayton and legislators who will be writing up a new budget when the Legislature convenes in January.

State forecasters are predicting a $1.037 billion surplus in the next biennium. State officials credited much of the surplus to lower than expected Health and Human Services costs, due to lower costs negotiated with health care providers and insurers, and fewer people signing up for certain services.

While this is an encouraging statistic, it should not be a green light to increase state spending. Forecasts are just predictions of what will happen over the next two years, and the money isn’t really in the bank. The state should proceed with a cautious eye to keep a tight lid on spending.

There’s good reason for that. On Thursday, Dayton said there are $2.37 billion worth of requests for funding waiting for the budget writers. The predicted surplus wouldn’t even cover half of the requests.

It is up to the governor and legislators to come up with a budget that meets the state’s most urgent needs and invests in selected programs that will improve and develop the state.

Gov. Dayton on Thursday mentioned his main wish is to increase child care tax credits by $175 million, but had no specifics on what to do with the rest of the surplus.

The governor will be preparing his budget proposal to present in January to a Legislature where the House is now controlled by Republicans. We hope that with strong Republican input the next state budget will keep closer control of spending than the last one approved by a DFL-controlled Legislature.