REGIONAL— Oodles of money is piling up in Minnesota’s state government accounts, giving the Legislature plenty to spread around in the 2022 session and adding another layer to next year’s campaign themes.
The Department of Minnesota Management and Budget projected Tuesday that the state has a whopping $7.7 billion surplus in the general fund. Strong growth in income, consumer spending and corporate profits drove extraordinary revenues in fiscal year 2021, according to MMB, and higher tax receipts are expected to continue with the improvement of the economic outlook.
In percentage terms, it amounts to 15 percent of the current spending in the two-year budget adopted this summer.
The forecast provides a look through the end of the current budget in mid-2023 and the two years beyond. The estimate will be apart from roughly $1.2 billion in federal COVID-19 relief funds headed the state’s way and not directed yet to a specific purpose.
DFL Gov. Tim Walz previewed the report in a speech Monday to county leaders, saying the forecast figures “will be the best that they have ever been.” Walz has promoted monthly tax collection tallies as evidence the state economy is in solid shape three years into his watch.
The fiscal gusher will undoubtedly feed calls for tax cuts, increased payments to schools and additional programs to help people regain their footing after the long pandemic. 
“The top priority of Senate Republicans this session will be to provide additional tax relief to Minnesotans across the state,” said Republican Majority Leader Jeremy Miller of Winona.  
Business groups are already lobbying to head off a hike in unemployment taxes set to kick in to refill a fund drained over the past two years, and House Republicans are on board with that idea, saying it would block a tax increase on businesses of up to 15 percent. 
DFLers have not yet committed to refilling that fund but are taking credit for the surplus. 
“Democratic policies work. When workers, families and small businesses get help, the economy booms,” said House DFL Majority Leader Ryan Winkler on Twitter. “This is the time to double down on our support for working Minnesotans with paid leave, child care, housing, infrastructure and better schools.”
Not all of the money the forecast estimate is built from has actually materialized, and lawmakers won’t get to dictate where all of it goes.
By law, some dollars are taken off the top to bolster dedicated funds, pay off accounting shifts and restock the reserves. That could mean hundreds of millions of dollars are locked up before the Legislature does a thing. Without that law the surplus would have been even bigger.
Some $870 million were shifted into the state’s rainy-day reserve, bringing it to an all-time high of $2.6 billion.
Lawmakers don’t return to the Capitol until Jan. 31, and they’ll be aiming to finish by mid-May to hit the campaign trail. The governor’s office and all 201 legislative seats are on the line in November.
Minnesota Public Radio News provided this story. You can listen to MPR News at 89.3 FM in Ely and at 92.5 FM on the Iron Range.