Association of Metropolitan School Districts has an excellent overview of the MN Budget forecast and what it means.
Originally posted on 05 Dec 2011 07:05 AM PST
What does the November forecast tell us?
- An estimated $876 million dollar balance is projected for 2012-2013 (revenues were $358 million higher and expenditures were $205 million below expectations).
- A projected deficit of $1.3 billion is shown for 2014-2015.
- Current law requires the surplus to go into the state’s reserves, so $255 million will go to the cash flow account to restore it to $350 million and $621 million to the budget reserve which would bring the reserve to $648 million-just short of the statutorily desired level of $653 million. After the reserve is restored to $653 million, future surpluses would go toward repaying the school aid payment shift and then the property tax recognition shift.
- State revenues are up by 1.2%
- Expenditure reductions are driving the balance of the surplus with two-thirds of the reductions coming from the Health Human Services area.
- K-12 expenditures are growing, but at a slower pace than expected.
- School levies came in lower than projected in the February forecast resulting in lower than expected savings from the shift.
- Minnesota’s economy is likely to do better than the U.S. economy in 2011 & 2012.