Last week many concerned Minnesotans testified on the needs of our state at the House Ways and Means Committee hearing on budget resolutions.
Policymakers are getting ready to form the state’s FY 2016-17 budget, and as part of this process, the House and Senate put together their budget resolutions. These resolutions set maximum amounts for the state budget’s general fund revenues and expenditures – basically setting the size of the budget “pie,” and the amounts set aside in the budget reserve and cash flow accounts, also known as our “rainy day” funds.
Each session, the House and Senate put forth the outlines of their budgetary visions through these resolutions. Once these are set, the legislative bodies put together their targets for the finance committees, which is where we’ll start to see the budget really take shape in the omnibus spending and tax bills.
Given the context of the state’s projected $1.9 billion surplus, policymakers should continue charting a path where more Minnesotans have access to economic opportunity.
While Minnesota’s economy has finally turned a corner, testifiers at the Ways and Means hearing highlighted areas of needed investments, including: supportive services that help seniors and people with disabilities live at home, opportunities for the state’s students to make sure they’re ready for college and the workforce, and improvements to our roads and bridges. We have also written about the uneven economic recovery and the need to invest in those Minnesotans who have been left behind.
Policymakers also expressed great interest in the size of our state’s budget reserves. In the 2014 Legislative Session, policymakers improved our budget reserve to better meet the needs of Minnesotans during economic downturns, and dedicated up to one-third of any surplus in the November Forecast to building the reserve. In the most recent November Forecast, this meant that $183 million was added to the reserve. Now, at $1.3 billion, Minnesota’s total rainy day funds are much closer to what the state needs to weather a potential recession, which Minnesota Management and Budget estimates is $2.2 billion.
As policymakers decide what to do with the projected positive balance, they should continue to make targeted investments in a future of opportunity for all Minnesotans.
The House is expected to release its budget resolution tomorrow, with the Senate’s resolution expected Thursday or Friday.