Minnesota's budget surplus is now projected at $17.6 billion between now and June 2025, per @MMBCommunicates.
The projections will help #mnleg decide short-term spending plans and a two-year budget.
@MMBCommunicates Higher-than-expected tax collections and #mnleg's failure to strike deals in 2022 have contributed to another record surplus, which Democrats now have control over.
Initial story ahead of news conferences that start at 11:45 a.m.:
fox9.com/news/minnesota…
@MMBCommunicates There's the full budget forecast: mn.gov/mmb-stat/000/a…
@MMBCommunicates "The current baseline forecast hinges critically on the Fed’s ability to curb inflation."
You can see how Minnesota's forecasting firm, IHS, was wildly off with its 2022 inflation prediction:
@MMBCommunicates For you Fed watchers: IHS expects the Federal Reserve will keep its target interest rate at or near 5% into early 2024:
@MMBCommunicates Minnesota's forecasting firm predicts a mild, three-quarter recession starting in the 4Q 2022 (the current quarter).
Mild because IHS projects only a slight decline in U.S. GDP + flat employment thru 2023 and 2024.
@MMBCommunicates Minnesota will save an estimated $280 million this biennium (off a $20.5 billion expectation) because of lower student counts in public schools, which are expected to continue declining.
@MMBCommunicates Minnesota is sitting on such a big pile of cash that it's making more cash as interest rates rise. That's helping fuel the surplus:
@MMBCommunicates Don't expect Minnesota's housing crunch to get better in the near term.
Housing starts, already tumbling this year, will fall further in 2023, per projections:
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