Slight state budget improvement projected for Minnesota

ST. PAUL -- Minnesota's state government budget is a bit brighter than expected.

Several sources this morning reported the state will have $323 million more in the current two-year budget than predicted in a November budget forecast. The official announcement was to come later in the morning, with Gov. Mark Dayton and legislative leaders making comments soon afterwards.

In the next budget, for the two years beginning July 1, 2013, today's report continues predicting a more than $1 billion deficit.

Today's surplus projection, slight in terms of a $36 billion budget, is on top of a surprise $876 million surplus announced in November.

State law requires the surplus to first go to replenish state reserves and then to begin repaying school districts for state what the state has borrowed from them in recent years. The state owes districts more than $2 billion.

The importance of today's forecast is that it sets the stage for any spending changes that could come during the 2012 legislative session that could last nearly three more months.

While the law now commits a surplus to the reserve and repaying schools, legislators who have other spending priorities could push legislation to allocate the projected surplus to other uses.

The expected surplus comes from a combination lower-than-planned spending and slightly higher tax collections.

Don Davis reports for Forum Communications Co.