St Paul (KROC AM News) - Governor Dayton and the Minnesota legislature will have more money to work with when they begin putting together a new state budget next year.

State officials Friday released a new economic forecast and it projects a surplus of $1.4-billion by the end of the next two-year budget.

The current budget - which expires June 30 next year - is projected to have a surplus of $678-million. And that’s after $334-million is added to the budget reserve, which will rise to over $2-billion as a result.

Officials say lower revenue projections due to slowing economic activity will be offset by reduced spending estimates.

The latest report estimates revenues will grow to $45.3-billion during the next budget period. Spending is projected to rise to $44.6-billion.

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