Budget Outlook Stable - Minnesota...Budget Outlook Stable • Projected balance improves to $1.513 billion for FY 2020-21, $181 million higher than November • Budget reserve remains
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Budget Outlook Stable
• Projected balance improves to $1.513 billion for FY 2020-21, $181 million higher than November
• Budget reserve remains at $2.359 billion
• FY 2022-23 continues to show structural balance, however budget challenges remain
• Economic outlook stable, slowdown remains in forecast
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U.S. Outlook Stable;Slowdown Remains in Forecast
2.32.1 2.0
1.6 1.5
2.32.1 2.0
1.71.5
2.4
2.9
0
1
2
3
4
2017 2018 2019F 2020F 2021F 2022F 2023F
November 2019February 2020
Real Gross Domestic ProductAnnual Percent Change
Source: U.S. Bureau of Economic Analysis (BEA), IHS Economics (IHS)3
State Unemployment Rate has Risen; Remains Below U.S. Rate
3.5%
3.3%
0%
2%
4%
6%
8%
10%
12%
1990 1995 2000 2005 2010 2015
U.S.
Minnesota
Unemployment RateMonthly, Seasonally Adjusted
Source: MN Department of Employment and Economic Development (DEED)
U.S. Recession
10+ Years
Revenue Forecast 0.2% Higher
($ in millions)
FY 2020-21 Feb. Forecast
ForecastChange
Individual Income Tax $25,988 $(51)General Sales Tax 12,044 (81)Corporate Franchise Tax 3,114 217All Other Revenue 7,606 11
Total Revenue $48,752 $96
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Forecast Risks
Consumer confidence
Financial market volatility
Trade policy uncertainty
Prolonged and widespread virus outbreak
16 months remain until the end of FY 2020-216
Overall Spending Forecast Down 0.2%
($ in millions)
FY 2020-21 Feb. Forecast
ForecastChange
E-12 Education $19,999 $(99)Property Tax Aids & Credits 3,872 7Health & Human Services 14,682 5Debt Service 1,130 (2)Other 8,689 (2)
Total Spending $48,373 $(91)
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Current Biennium’s Balance Increases
($ in millions)FY 2020-21
Nov. ForecastFY 2020-21
Feb. ForecastForecastChange
Beginning Balance $3,971 $3,971 $ -
Revenues 48,656 48,752 96
Spending 48,463 48,373 (91)
Budget Reserve 2,359 2,359 -
Cash Flow Account 350 350 -
Stadium Reserve 124 130 6
Budgetary Balance $1,332 $1,513 $181
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Planning Estimates
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($ in millions) FY 2020-21 FY 2022-23BiennialGrowth
Annualized % Growth
Forecast Revenues $48,752 $51,501 $2,749 2.8%
Projected Spending 48,373 51,036 2,633 2.7%
Structural Balance $379 $465
Estimated Inflation n/a $1,119
Current Law Reserve Changes in FY 2022-23
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($ in millions) FY 2020-21 FY 2022-23Reserve Change
Budget Reserve $2,359 $1,867 $-491
Cash Flow Account 350 350 -
Stadium Reserve 130 263 +133
Budget Reserve
$0 $9
$658 $656 $661
$994
$1,597 $1,603 $1,698
$2,075
$2,359 $2,359
$1,867 $1,867
0
500
1,000
1,500
2,000
2,500
Budget Reserve: FY 2010 - 23($ in millions)
FY 2020-21 Balance: $2.359 billion$491Mj
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Inflationary Estimate
($ in millions) FY 2020-21 FY 2022-23BiennialGrowth
Annualized % Growth
Forecast Revenues $48,752 $51,501 $2,749 2.8%
Projected Spending 48,373 51,036 2,633 2.7%
Structural Balance $379 $465
Estimated Inflation n/a $1,119
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