Thread by @TheoKeith

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: