Minnesota budget surplus updated to $17.5 billion

Minnesota's projected budget surplus is now $17.5 billion, state officials announced Monday.

Why it matters: The figure, included in the latest state economic forecast, gives lawmakers a better sense of how much money is on the table as they build the next two-year budget.

Driving the total: State revenue from income and corporate taxes are up, per the Minnesota Department of Management and Budget (MMB).

• But a new law requiring inflation to be factored into the spending side of the forecast means the surplus remains effectively unchanged from the record $17.6 billion that was announced in December 2022.

Between the lines: A big chunk of the surplus is one-time money leftover from the current two-year budget cycle. But MMB still predicts revenue will exceed spending in coming years.

What to watch: Democratic Gov. Tim Walz and state lawmakers at the DFL-controlled Legislature have vowed to use the surplus to fund a number of progressive priorities, including paid family leave and tax credits for families and lower-income residents.

This is a developing story. Check back for updates.