State finance officials said Tuesday they deposited $150 million into the state’s budget reserve, strengthening Minnesota’s financial standing in case of an economic downturn.
The state’s total budget reserve is $811 million. There is also $350 million in a cash-flow account.
Gov. Mark Dayton and the DFL-controlled Legislature dedicated the $150 million to the budget account earlier this year but the move didn't take effect until today. They also passed a law requiring a portion of future surplus funds also be put into the reserve. Dayton, who is up for re-election this year, hailed the news.
“Minnesota has finally turned the corner on a decade of deficits that shortchanged our students and stymied needed progress for our state,” Dayton said in a prepared statement. “We turned a $6.2 billion deficit into a surplus, repaid all the $2.8 billion previously borrowed from our schools, made important new investments in education and job creation, and increased the reserve to its highest level in history.”
Dayton and DFL legislative leaders passed a budget in 2013 that raised roughly $2.1 billion in new taxes. The budget plan and an improved economy resulted in a $1.2 billion projected budget surplus in February.
Dayton and lawmakers put money into the reserve, cut $550 million in taxes and increased some spending.
The reserve fund gives state policy makers a cushion if revenues or expenses deviate from forecasts enough to cause a deficit.