Trump Tax Law Credited With $550 Million Jump in State Revenues
St. Paul, MN (KROC-AM News) - The state government’s financial outlook improved significantly over the past several months. The Minnesota Office of Management and Budget today issued the 2018 February Budget and Economic Forecast which now predicts the state will end the current budget cycle in June of next year with a $329 million surplus. That represents a nearly $520 million improvement.
The previous state revenue forecast released last November predicted a $188 million deficit, but most of it was erased when Congress and President Trump restored federal funding for the Children’s Health Insurance Program. Officials say the renewal of federal funding for that program was the most significant driver in a projected $167 million reduction in state expenditures through the end of the biennium.
Officials say most of the rest of the shift from red to black ink is due to increased state revenues as a result of the economic stimulus created by federal tax law changes. The report shows the state’s projected revenues have been increased by over $350 million when compared to the November forecast.
The report also notes the improved budget outlook extends into the next two-year budget cycle, with early estimates predicting a surplus of over $300 million by the end of June in 2021.
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