February Forecast 2012
On February 29, 2012, Minnesota Management and Budget released the February Forecast revealing a $323 million surplus. This is in addition to the $876 million surplus projected in the November Forecast.
Of the $323 million, the first $5 million will go to the budget reserve to bring it to its statutorily designated level of $653 million. The remaining $318 million will go toward beginning to pay back the education aid payment shift. This will increase the percent of state aids payable to schools during the current year from 60 percent to 64.3 percent. It is important to note that even after this payment, the state will continue to owe Minnesota school districts $2.4 billion to fully repay the delayed aid payments and property tax recognition shift that were enacted in recent years to balance the state budget. During a recent House Education Finance hearing, staff noted that the payment represents about 11% of the obligation owed to our schools. Rep. Mindy Greiling further noted that if you include the special education cross-subsidy, currently about $700 million, the state’s obligation to school districts rises to $3.1 billion or $3,100 per pupil.
Also of note is that the forecast still projects a deficit of $1.1 billion for the 2014-2015 biennium – and that does not include the impact of inflation.