$1 Billion Surplus! The good news and the not so good news…
Excerpt from January 16, 2015 Update
When the Minnesota Budget Office released its projected budget we saw a significant forecasted budget surplus for the first time in years! $1 billion surplus–great news for the state’s economy, but there is a word of caution from both sides of the aisle.
The way forecasted budgets work, the projections on the revenue side (money taken in through taxes) is adjusted for inflation. But the spending side of the ledger (money spent) is NOT adjusted for inflation.Here is an analogy—you assume that you will be getting a raise in 2015 AND you assume that not one of your expenses will increase in cost.
In a nutshell, if we keep our existing budget commitments and adjust for inflation, the surplus goes away – read more.