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Published December 01, 2011, 10:20 PM

Minnesota budget surplus deceptive, according to some lawmakers

Moorhead, MN (WDAY TV) - A shocking change for Minnesotans; the two year budget is bigger than first expected, by $876 million. Many lawmakers thought the forecast would be a one billion dollar deficit, not a major surplus. But the news comes with caution. Things may be looking up, but the tough economy could take another nose dive and a $1.3 billion deficit still looms in 2014.

By: Travis Skonseng, WDAY

A shocking change for Minnesotans; the two year budget is bigger than first expected, by $876 million. Many lawmakers thought the forecast would be a one billion dollar deficit, not a major surplus.

But the news comes with caution. Things may be looking up, but the tough economy could take another nose dive and a $1.3 billion deficit still looms in 2014.

Call it a big shock. Reaction all around to the $876 million budget surplus is astonishment.

Jim Showalter – Budget Commissioner: “I'm not quite sure what to say. My daughter who's about 8 years old would probably say it best. ‘Surprise!’”

The increased money comes from higher revenues and less spending, much of it on health care programs. Higher wage growth and lower unemployment only rang up the total more.

State Representative Paul Marquart – (D) Dilworth: “As far as having new money to spend, it’s really not there.”

Republicans quickly note this is proof higher taxes aren't needed.

State Senator Amy Koch – (R) Majority Leader: “A Dayton tax hike plan is debt.”

While Governor Mark Dayton hails the surplus as a result of higher property taxes.

Governor Mark Dayton – (D) Minnesota: “Republican legislators devotion to protecting millionaires from paying their fair share of taxes comes at the expense of everyone else.”

Keith Langseth: “We really didn't balance the budget this last year. We came $1.340 billion from balancing it. This gets us about 2/3 of the way there.”

The number isn't what it seems. The state still has to pay back nearly $2 billion in IOUs.

Keith Langseth: “We've taken a lot of money from the school districts and school aid shifts. We're going to have to start buying some of them back.”

Current law requires the surplus to be put back into reserves.

Paul Marquart: “All of it's been spent.”

But there is a silver lining. It means there likely won't be more cuts to property tax relief, health care, and local government aid in Minnesota. But that comes with a warning.

Paul Marquart: “We can't go hog wild here and think we can all of a sudden spend all sorts of money.”

The next forecast comes in February. That one is used to make the budget.

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