Minnesota Report
On Thursday, the State Economist Anthony Becker, Office of Management and Budget Director Ahna Minge and the Commissioner for Revenue Paul Marquart will release the February Revenue Forecast as developed by the Office of Management and Budget with assistance from and outside Economics firm.
In this forecast the state has adequate resources to meet the current state budget FY2024-25 but in the out years, the FY2026-27 biennium, $1.1 billion less than prior estimates. There are pending deficits and especially with the amount of revenue to be provided by the Federal Government via the Donald J Trump Administration the reliability is in doubt.
The Federal Government provided $39,840M, which accounts for nearly 1/3rd of our state budget, but this figure also included onetime COVID money, which will not return.
On the expenditure side we have viewed the information we gleaned from the November 2024 Revenue Forecast, but this is just a marker for tracking dollars prior to the forthcoming legislative session and all budget decisions will be based on the February numbers, although with the instability brought by the Trump Administration and the fact the impact of a Federal Tax Bill being unknown, there are a significant amount of information which remains unknown.
These are the categories in which state monies are spent.
- E-12 Education, state support for pre-kindergarten through grade 12 educationAmount=$28,049M
- Higher Education, state funding for public universities, state and community collegesAmount=$4,502M
- Property Tax Aids and Credits, local government aid and grant programs, property tax refundsAmount=$5,687M
- Health and Human Services, funding for mental health and other institutions, public assistance, health care, early childhood, and general public health programsAmount=$57,173M
- Public Safety and Judiciary, includes state courts, correctional institutions, and crime-related programsAmount=$4,744M
- Transportation, transportation systems, highway construction and maintenance, and the Minnesota State Patrol
- Amount=$12,073M
- Environment, programs for environmental protection and recreation, account forAmount=$3,851M as a line item.*
- Economic Development, Energy, Agriculture and Housing, programs for improving opportunities, growth, housing stability, agriculture and economic success to individuals, and businesses and communities*
- State Government and Veterans, including administrative, constitutional offices, and legislative agenciesAmount=$5,243M
- Capital Projects and Grants, payment of principal and interest on state bonds along with other capital project spendingAmount=$1,347M
- General Fund Refinance, prior year general fund expenditures that have been refinanced to federal resources*
- OtherAmount=$10,146M
* There are three categories listed on the same page of the State Expenditures, which are not clear and hence lack a specific spending amount. The line of a specific line item makes this appear a bit fuzzy and not clearly defined.
These are Environment, Economic Development, Energy, Agriculture and Housing and General Fund Refinance. For instance the line item is Environment and Energy but the line item is only for Environment and there are not specific line items for Economic Development, Agriculture and Housing.
This is quite confusing.