As we do each year after the conclusion of the legislative session, Minnesota Management and Budget (MMB) is releasing the official statement for the general fund. This statement reflects (1) the actions of the 2017 Regular Legislative Session; (2) the 2017 Special Legislative Session; (3) the Governor’s vetoes; and (4) the June 26 Ramsey County Court Order providing temporary funding for the House and Senate for up to 3 months.

While not an official forecast, the general fund statement is MMB’s best estimate of where the state’s budget now stands. The general fund statement is based on the February Forecast with adjustments for legislative session. Any economic changes since February – good or bad – are not incorporated into the budget estimates.

MMB continues to assume that there is risk in our February Forecast numbers. The February forecast assumed economic growth from a deficit-financed tax bill at the federal level which has not yet been introduced. In addition, the July Revenue and Economic Update, which was released Monday, shows total revenue estimates for FY 2017 will be $104 million lower than estimated in February. Proposed changes at the federal level to the Medicaid program could also have significant negative impacts on the state’s budget.

“The budget numbers released today continue to reflect a balanced budget for the State, however, there is very little room for error to maintain our current balance if there is a negative fluctuation in our economy or major cuts to federal programs,” said Myron Frans, Minnesota Management and Budget Commissioner. “For example, the current GOP healthcare proposal in the U.S. Senate cuts funding in Minnesota for Medicaid and MinnesotaCare by more than $2 billion by 2021. Our current budget balance cannot absorb cuts of that magnitude, nor the myriad of other federal program cuts proposed in Congress.

“We are keeping a watchful eye on actions at the federal level and monitoring any changes to our economy as we move forward.”

Current General Fund Balance:

• The February Forecast projected a general fund balance for the FY 2018-19 biennium of $1.651 billion. After accounting for 2017 legislative activity, we are projecting a general fund balance of $163 million in FY 2018-19.

• The February Forecast projected a planning estimate for the FY 2020-21 biennium of $2.083 billion. The general fund planning estimate released today is $376 million in FY 2020-21.

• Today’s general fund balance includes $16 million funding for the House and Senate that was ordered by the Ramsey County District Court on June 26 pending final legal resolution of the Governor’s line item vetoes. If the legislative funding is restored in full, an additional $113 million would be subtracted from the bottom line reflected in today’s general fund balance. MMB has also released an end of session general fund statement that reflects only enacted budget bills.
  

Read the complete News Release.