Budget Forecast
Earlier this week, Minnesota Management and Budget announced the November budget forecast, which projected a positive budget balance of $641 million for the 2020-21 biennium. The forecast also projects a $1.237 billion shortfall for 2022-23. I believe the 2022-23 forecast is a bit understated because inflation is not considered. Automatic increases were built into prior legislation for future years, and the projected shortfall may be closer to $2.5 billion. It is important to remember that this is only a forecast and like the last one could be significantly different when we actually get to 2022.
The budget surplus can mostly be attributed to two simple factors. Minnesotans are spending more than expected, and state spending is way down. Although lower-income families have been hit harder, total income for Minnesotans did not decline as much as previously anticipated. Federal unemployment assistance helped keep sales tax and income tax receipts high as well. State spending is projected to be $1 billion less than anticipated this year. This can be attributed to fewer people using health care services, federal funding for Medical Assistance increasing, and public-school enrollment falling by nearly 13,000 pupils.
COVID-19 Response Committees/Upcoming Sessions
While the long-term economic situation of our state remains uncertain, the short-term picture reveals we can afford to pass an immediate economic relief package for workers and small businesses who are still bearing the brunt of this virus. To that end, bi-partisan COVID-19 committees made up of both House and Senate members have been created. They will be tasked to address 17 separate COVID-impact related activities, such as small business assistance, individual assistance with food and care, and the reopening of facilities, such as gyms. Also, these committees will be looking at replacing or enhancing some of Governor Walz’s executive orders.
If there is a consensus among the Legislature and the Governor, bills could be passed in the next special session on December 14th, and aid could get to Minnesotans by the end of the month. It is probably more likely though that recommendations will be ready for general discussion, debate and legislative action at the beginning of the next full legislative session on January 5th. Governor Walz estimated the package could range anywhere from $300 million to $600 million.
Since the next special session on December 14th will almost certainly be for only one day, it is very unlikely any legislation outside COVID-19 relief will be taken up. The next regular session starts January 5th, so anyone with issues or concerns you would like to have me bring up should contact me at (651) 296-2556 or at sen.jerry.newton@senate.mn The earlier you contact me the better if you are looking to have legislation drafted.
Housing & Energy Assistance
This week Governor Walz and Lieutenant Governor Flanagan are highlighting efforts to support Minnesotans experiencing homelessness and ensure people can afford to stay in their homes during the COVID-19 pandemic. They are encouraging Minnesotans who are behind on their rent, mortgage, or utility payments to apply for the Administration’s Housing Assistance Program by Monday, December 7, 2020.
Minnesotans seeking housing assistance should call 211 or apply at 211unitedway.org by Monday, December 7, 2020. Greater Twin Cities United Way’s 211 Resource Helpline has dedicated multilingual staff available to answer questions.
Additionally, Minnesota’s Energy Assistance Program received more than $106 million in federal funding to help income-eligible Minnesotans pay their heating bills this winter. Minnesotans should submit an application to the local service provider in their area. To find your local service provider, call 800-657-3710 or visit the Commerce Department’s Energy Assistance Program web page.
If you have any questions or wish to unsubscribe from this Newsletter, please feel free to contact my office at (651) 296-2556 or by email at sen.jerry.newton@senate.mn.
Thank you and have a great weekend,
Jerry Newton
State Senator
District 37