Minnesota surplus holds steady; sets stage for budget debate

ST. PAUL, Minn. (AP) — An updated forecast puts Minnesota’s budget surplus at a still-enormous $17.5 billion.

It reflects an improvement in the fiscal picture, setting the stage for the nitty-gritty of debates on spending and taxes. While the surplus is down slightly from $17.6 billion projected in November, Monday’s forecast now factors in the impacts of inflation on state spending.

The Legislature will use the new projection to craft the next two-year budget, which takes effect in July.

Democratic leaders are noncommittal on whether they’ll support Gov. Tim Walz’s call for tax rebates. Republicans will announce their own “Give It Back” plan Tuesday.