Unexpected surplus of $876 million forecasted for the current biennium
The November economic forecast just released surprised many who were predicting a deficit to the tune of $500 million to $1 billion. However, the state economist is forecasting a surplus of $876 million for the rest of the 2012-2013 biennium. This improvement in the state’s short-term financial outlook can be partially attributed to better than average employment and wage growth (compared to the national average), and better than anticipated revenues, combined with lower spending in fiscal year 2011. Minnesota Management and Budget Commissioner Jim Schowalter and State Economist Tom Stinson cautioned that while Minnesota is outperforming the United States, there is still plenty of risk out there and the state needs to continue to be cautious.
In February 2012, another forecast will come out that will fine-tune the November forecast with data that becomes available early in the calendar year. In other words, the November forecast will help guide the upcoming legislative session, but lawmakers and the governor will rely on the February forecast for final policy-making and budgeting decisions. Schowalter said the surplus will be used to restore state reserves. He said if it had been larger, the state would have begun to buy back the K-12 education shift.
Minnesota Management and Budget has posted a press release on their Website.
Documents can be found at http://www.mmb.state.mn.us/fu-current-fore-nov.
Legislative leaders will be commenting on the forecast today following the press conference. You may view this live at www.senate.mn/media.
2011 Mandates and Curiosities available online
The 2011 Mandates and Curiosities document is available on-line. Mandates and Curiosities is a summary designed to highlight legislation passed during the 2011 regular and special sessions that affects the Minnesota State Colleges and Universities system.
You may find the 2011 Mandates and Curiosities document at the below link:
http://www.govtrelations.mnscu.edu/publications/mandates_2011_docs/2011mandates-curiosities.pdf
You may find previous Mandates and Curiosities documents dating back to the 2004 legislative session at the below link:
http://www.govtrelations.mnscu.edu/publications/index.html
What’s happening in Washington
Earlier this month, President Obama signed a small omnibus bill that combines three spending bills in one; Agriculture, Commerce-Justice-Science and Transportation-HUD. The bill contains a continuing resolution to keep the federal government funded and operating at current levels through Dec. 16. There are 12 appropriations bills in total, so there are still 9 remaining bills to pass before the fiscal year 2012 budget is set, including the Labor-HHS-Education bill. With time running out, Congress may decide to wrap all 9 remaining appropriation bills into one large omnibus bill.
The Joint Committee on the Deficit Reduction, otherwise known as the Super Committee, charged with identifying and recommending ways to reduce the United States budget deficit by $1.5 trillion over the next ten years, failed to vote on a fiscal package by the Nov. 23 deadline, which has triggered automatic spending cuts of $1.2 trillion to take effect Jan. 3, 2013.
The 12 member committee, made up of 6 Republican members and 6 Democratic members had 3 months to negotiate a plan, but with Republicans opposing any new taxes and Democrats opposing any deep cuts in Social Security and Medicare, they were unable to reach a compromise. There was and continues to be concern over the $1.2 trillion in deep cuts to programs, as well as the elimination of the Bush tax cuts. The Super Committee co-chairs, Sen. Patty Murray, D-Wash, and Rep. Jeb Hensarling, R-Texas, issued a written statement, “Despite our inability to bridge the committee’s significant differences, we end this process united in our belief that the nation’s fiscal crisis must be addressed and that we cannot leave it for the next generation to solve. We remain hopeful that Congress can build on this committee’s work and can find a way to tackle this issue in a way that works for the American people and our economy.” So now the responsibility to reduce the deficit falls back to the full Congress. Many wonder if the two sides can come together and find a compromise with an election coming up in 2012, however; the two big deadlines of the Bush tax cuts expiring after December 31, 2012 and the automatic spending cuts set to take effect Jan. 3, 2013, may trigger a cause for action.
The Student Aid Alliance has launched a campaign in support of federal student aid programs. Over 130,000 people have signed the statement of support, which can be found at: http://action.studentaidalliance.org/5371/save-student-aid-statement-support/?src=AASCU .
The White House has launched a new challenge for college and university students, the Campus Champions of Change Challenge, which invites college and university students from across the country to demonstrate how their student-led project is improving their campus community and helping America win the future. Submissions are due by Friday, Dec. 9, 2011. To learn more about the Challenge, go to www.whitehouse.gov/blog/2011/11/02/announcing-2011-campus-champions-change-challenge .