Minnesota collected $555 million more in taxes over the last three months than state economists had predicted in February as both individual and corporate income turned out higher than expected.In addition, Minnesota had $811 million in its reserve fund as of this time last year, which means it has major flexibility when it comes to accelerating those road construction projects, or even cut taxes, since the funds bank against revenue shortfalls.
The news, announced Friday, means lawmakers will have even more money than expected to dispose of next year. Beset by gridlock, lawmakers last month left close to $1 billion of projected revenue unspent when they adjourned in June. The $555 million of extra money, a 2.8 percent increase, is in addition to that unspent money.
Lawmakers could spend some of this surplus to lower taxes, start new programs or road construction projects, bank some of it in the reserves for a rainy day -- or all of the above.
Keep those numbers from Minnesota in mind over the next two days when Scott Walker tries to justify the $72.7 billion budget he'll sign this afternoon. This budget will cut $250 million from the UW System, give little to no additional state aid to already-strapped public school districts or local governments, have $1.1 billion in undetermined future cuts with lapses, and will see highway improvement spending be reduced from $1.46 billion in the recently-completed fiscal year to $1.02 billion in 2016-17 (a drop of more than 30%).
Looking ahead, Wisconsin's rainy day fund has only $280 million in it, and the next budget already has a $490 million structural deficit, with $1.4 BILLION in lapses baked in. You tell me which state is poised for better economic growth and fiscal stability in coming years?
And it's not like Minnesota has had to endure hard times to build up this strong budget balance. Look at the job growth from the "gold standard" Quarterly Census on Employment and Wages in the last 4 years, as well adding nearly 3 times as many jobs for the first five months of this year.
Private sector job growth, Dec 2010- Dec 2014, QCEW
Private sector job growth, 2015
So between these two bordering states with similar demographics, how is it that the governor of the underperforming state of Wisconsin the one who thinks he should be promoted?