Legislative leaders receive the February Revenue forecast for 2015 shortly. The House Majority is getting there update at 9:30 am, staff at 10:00 am and the DFL minority at 10:15 am. There will be a public press conference at 11:00 am It is expected to show additional revenues for the 2015-16 Fiscal Year. All early indicators are good. Inflation is currently less than 1%, oil prices are at their lowest figures in more than 12 years and state revenues for November, December and January are up $297,000.
This means there will be more money on the bottom line. Republican House Speaker Kurt Daudt (R-31A, Crown) is anticipating more money and is discussing returning a portion of the increases in the form of tax reductions, while DFL Senate Majority Leader Tom Bakk (DFL-03, Cook) is looking to increase spending for Higher Education and Nursing Homes.
We will hear later what Governor Mark Dayton’s (DFL) priorities are at his press conference.
Based on historical forecasts and economic trends we will not be surprised to see the surplus exceed 1.6 billion. Remember it was nearly 1.3 billion in November. This will mean more people looking to garner a pie of the pie.
It will also create an opportunity for funding items not set as high priority, but will significant long term gains such as infrastructure. Along with the Revenue Forecast we will learn the state’s Debt Service Capacity. As the Budget increases the state can meet higher amount of spending through General Obligation Bonds. This may set the stage for a larger Bonding Bill in the odd-year session.