Hopkins Legislators Pleased With New Budget Forecast

Hopkins legislators are please with the improved economic forecast but expect tough budget discussions ahead.

The more-optimistic forecast still leaves a $5 billion hole for the state to climb out of, but Hopkins Sen. Ron Latz (DFL-District 44), of St. Louis Park, noted that the projection is 20 percent improvement.

“It is pretty significant,” he said.

Gov. Mark Dayton planned to use that “significant” improvement to eliminate a proposed temportary income tax surcharge on the wealthiest and restore funding for long-term care, metro and rural transit, fire safety training and the Minnesota Investment Fund, along with other changes from his original budget.

The tax surcharge was a particular target for Republicans, who argued that it would stifle growth. Removing the surcharge and taking a significant bite out of the deficit would seem to bode well for an agreement between the bitterly divided Legislature.

Yet Dayton’s recommended budget still contains tax increases, notably a new tax bracket for the top earners, and Latz doesn’t expect compromise to get much easier with the improved forecast.

“(Republicans) were upset about any talk of a revenue increase,” Latz said.

The improved budget situation could help a bonding bill that west metro lawmakers hope will include money for the Southwest light rail project. As it stands, though, nothing is happening with that bill at the moment, Latz said.