Governor Mark Dayton delivered remarks today following the release of the February budget forecast by MMB:
"Today's new budget forecast for the next two years is very good news for Minnesota. The projected deficit has been lowered by $463 million. That's a 42% reduction from what was predicted just three months ago.
By comparison, the $627 million deficit now projected for the next biennium is about one-tenth of the $6.1 billion deficit projected for the next biennium, when I took office in January 2011.
Next month, we will pay another $290M owed to our school districts from previous borrowing. We have now repaid almost $2 billion of that debt in the last year.
While the nation's economic recovery is slower than anyone would like, Minnesota is outperforming most other states and the national average. In 2012, our percent job growth was the 12th best of the 50 states. This forecast projects that we will return to our pre-recession, all-time highest employment by the end of this year, about nine months sooner than the nation as a whole.
It's not progress anybody is satisfied with, but it's a big step forward from where we were two years and two months ago. And this forecast also recognizes, for the first time, the mere $91M in savings from the health care contract reform--mere in the sense that we believe that its much higher than that, but the forecasters are lagging behind in terms of attributing money and so I expect that number will grow with subsequent forecasts.
I have not yet formulated my proposal for use of the $463M improvement in the forecast for the next biennium. I am told that it will take MMB a few days to possibly make very minor adjustments in today's numbers, and it will take the Department of Revenue a week to re-calibrate my tax proposals. So I am planning to release my revised budget proposal during the week of March 11th.
I expect to propose that most of the money be returned to Minnesota taxpayers in additional tax reductions. An up-front exemption from sales taxes on capital investments by businesses will encourage new construction projects and other business investments, which will continue our job growth. I also want to increase the Renters' Tax Credit, to treat Minnesota's renters fairly with homeowners, to whom I am proposing to provide a $500 property tax rebate.
But, again, I want to see the final projections by Revenue and MMB before I make my final decisions.
The one bad spot in today's forecast was that proceeds from the new e-tabs gaming continue to fall below projections. I want to emphasize that I trust Commissioner Schowalter today, that there is no financial problem at the present time. No bonds have yet been sold to finance the new stadium, and none will be until August. MMB can control the timing of that and future bond sales to manage this situation. And the gap in revenues from originally expected to now projected is $13 million for the next two years.
So it's not an insurmountable problem -- but it is a problem. We will be working with legislative leaders to solve it. And we will solve it."