I hope you enjoyed a blessed Christmas season and were able to be with your loved ones. I’d also like to thank those who are serving our country and sacrificing by being away from home and family.
When I was elected to the Minnesota House of Representatives two years ago, my main goal was to work to put Minnesota back on a fiscally responsible path. I believe this has been accomplished to a large degree.
As you may be aware, the Minnesota Management & Budget (MMB) recently issued an updated economic forecast. It shows a $1.3 billion surplus for the current biennium. This is the third straight forecast which has had a surplus. We had a $878 million surplus in November of 2011, a $323 million surplus in February 2012 for a total $2.5 billion surplus revenue for the biennium.
This is an impressive turnaround considering we faced a $6.2 billion shortfall before the 2011 legislative session.
State law stipulates how these surplus funds must be spent. First, we have replenished state reserves to the required $1 billion. Next we have completely repaid the K-12 funding shift that was part of the 2011 budget resolution. We have also paid back half of the K-12 shift we inherited from the previous legislature. The Governor can’t veto this payback as he did this past year.
The MMB report also projects a $1.1 billion shortfall for 2014-2015. This shortfall is caused by projected spending increasing 9% while revenues are projected to be up 5%.
If we only spend what we take in and the new Legislature keeps spending within the 5% projected revenue increase (or less), the shortfall would be eliminated-without imposing new taxes on Minnesotans.
There is no dispute that the budget is in much better shape than when we entered the Legislature in 2011. How did this happen? We are simply spending less and bringing in more revenue. This was made possible by some of the reforms that were enacted over the past two years. Our unemployment rate is 2% lower than the national average. All of this has given investors and other job creators more certainty because we have addressed the structural budget problem, lowered regulations and didn’t raise tax rates.
Forcing government to live within its means has paid dividends. I hope the new Legislature and the Governor continue to control spending and taxes. It will continue to help our Minnesota economy recover and grow.
Thank you for the opportunity to represent you in the Minnesota House. It has been an honor to serve the citizens of House District 8B the past two years.