Rep. Sondra Erickson

Dear Friends and Neighbors,

On Tuesday, Minnesota Management and Budget released their updated November forecast. Tuesday’s forecast showed a $641 million surplus for the current two-year budget cycle, and a $1.273 billion deficit in the 2022-2023 budget cycle.

This news is a significant improvement for our state’s economic outlook. At the beginning of the COVID-19 pandemic, state economists projected a $2.3 billion deficit for the current budget cycle, and a $4.7 billion deficit in the 2022-2023 cycle. Instead, we are now looking at a $641 million surplus for 2021-2022.

The improved outlook is thanks to better-than-expected tax revenues driven by a rebounding economy, strong consumer spending, and federal relief that allowed unemployed workers to continue paying income taxes (unemployment benefits are taxable income at the state level).

State spending also dropped by about a billion dollars. There was a $919 million drop in Health and Human Services spending as a result of lower-than-expected Medical Assistance utilization, lower-than-expected overall program utilization, and federal spending that helped cover portions of our public programs. There was also a $118 million drop in education spending because of lower public school enrollment with parents opting to home school their children or delay the start of kindergarten.

Overall, this is good news, and our stabilized budget outlook is thanks to the hard work, sacrifice, and resilience of Minnesotans and their families despite Governor Walz’s harmful shutdowns.

With House Democrats already signaling that tax increases may be coming next year; we must remember that families and businesses have scaled back their budgets and there is no reason we can’t ask government to do the same. Tax increases will only slow our economic recovery and job growth. Government MUST share in the sacrifice.

Staying in Touch

Please continue to reach out to me if you have any questions or concerns. I can be reached by phone at (651) 296-6746 or via email at rep.sondra.erickson@house.mn.

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