(Reuters) - Minnesota on Tuesday increased the projected balance at the end of its next two-year budget cycle by $250 million to $1.65 billion, while warning that uncertainty over U.S. economic policy poses “significant risk.”
The state now expects the current fiscal biennium to end on June 30 with a $743 million balance, $88 million higher than previously forecasted. It also increased the revenue estimate for the fiscal 2018-19 biennial budget by 0.7 percent to $45.66 billion, mainly due to stronger individual income taxes.
“Considerable uncertainty remains about which proposed U.S. economic policy changes will be enacted in the near term and their impact on the economy,” said the Minnesota Management and Budget Department forecast, pointing to potential changes to policies on trade, immigration, healthcare and business investment.
Republican Speaker of the Minnesota House Kurt Daudt said with the state budget structurally balanced, tax relief is “long overdue.”
“House Republicans will pass significant tax relief to put money back in the pockets of families whose hard work has helped generate the state’s budget surplus,” Daudt said in a statement.
But Melissa Hortman, leader of the Democratic-Farmer-Labor Party in the Minnesota House, said her members want to use the surplus to boost spending on education, job training, and transportation.
Reporting by Karen Pierog in Chicago; Editing by Matthew Lewis