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Walz announces additional $1.8B surplus, urges lawmakers to pass budget

Gov. Tim Walz and Lt. Gov. Peggy Flanagan responded to the report at the Minnesota State Capitol Thursday.
Credit: KARE
Minnesota Gov. Tim Walz responded to the State Revenue Report on Thursday.

ST PAUL, Minn. — Gov. Tim Walz is encouraging Minnesota lawmakers to put aside ideological differences and pass a budget on day one of the June special session.

Walz issued the challenge Thursday at a news conference where he was scheduled to deliver comments on the state revenue report. The governor began his comments by saying that the latest economic forecast came back and Minnesota is looking at an additional $1.8 billion in surplus.

The announcement comes after a forecast update in late February when Walz said a projected $1.3 billion deficit had become a $1.6 billion surplus, a dramatic swing of $2.9 billion that was attributed to a higher revenue forecast, lower projected state spending and an increased surplus for the current fiscal year. 

The $1.8 billion Walz talked about Thursday is in addition to February's surplus, making for a total of $3.3 billion in general fund revenues in May.

RELATED: MN budget forecast swings to $1.6B surplus from $1.3B deficit

"Those are budgetary projections," he reminded the public, but added that there's no reason to believe they won't be accurate.

"It gives us the opportunity, looking to the future, to make those investments that are important for our future," Walz said.

The governor encouraged lawmakers to find compromises in order to pass the state budget during the special session that's currently scheduled to begin Monday, June 14. He said he'll be sitting down with conference committees and leaders in the legislature on Thursday beginning at 1 p.m., in an attempt to help them reach agreements on "sticking points."

Walz said he hoped they could wrap up on Monday, but that it's really up to lawmakers.

"Minnesota's fiscal position is the strongest of any of the 50 states," he said.

When asked why it's difficult to come to an agreement on the budget when there's such a large surplus forecasted, Walz said some issues have become "politicized."

Walz said for areas where some want systemic change but there isn't enough support from others, "there will just be a stalemate and a status quo will maintain itself."

"There's no revenue increases, there's tax cuts involved," he said of the current budget plan. He said there is also relief for education and other areas severely impacted by COVID.

"It's these big ideological differences that folks are putting into this" that are holding things up, Walz said. He suggested that policy issues should be separated from the budget, adding that it's "irresponsible" not to finish a budget on time. A financial agreement is due July 1 or the state government could shut down.

"The passion that people feel for all these issues, that's real, that's what you should be doing," he said. "Trying to tie those to a fiscal budget is how you really get bogged down."

Walz said agreements for budgetary elements that lawmakers can find common ground on are already there.

"We have a constitutional responsibility to do a budget, should have been done on May 15," he said. "We are now down to the wire."

Walz also said Thursday that he believes an "off-ramp" for the eviction moratorium is in sight, with Minnesota's COVID cases at a 15-month low.

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