The Februrary budget forecast released on Wednesday was pretty good news.   When you add this surplus of $323 million with the $876 from November you have a total surplus for the 12-13 biennium of $1.199 billion dollars.  Under current law, the first $5 million is directed to the budget reserve bringing the balance to $653 million.  The remaining $318 million is committed to begin paying back the K-12 Education shift passed last legislative session.  After this action, $2.4 billion in school payment shifts remain.

Just like in November, lower spending estimates account for the majority of the surplus.  Approximately two-thirds of the change, or $230 million, and was primarily due to spending reductions in human services.  Revenue updates account for the other one-third or $93 million with the increase coming from income and sales tax.  State revenues are stable and Minnesota labor numbers are outperforming other states.

The forecast shows a projected deficit of $1.1 billion for fiscal years 2014-15.

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