Minnesota state budget
Energy policy • Public education • School choice • Public pensions • State budget • Ballot measures
|Minnesota state budget|
|State Credit Rating:||AA+ (as of May 2012)|
|Current Governor:||Mark Dayton|
|GF expenses:||$20.056 billion (estimated for FY 2013)|
|All funds expenses:||$35.766 billion (estimated for FY 2013)|
|Spending % Change:||14.16%|
|% from Federal Funding:||28.13%|
|Per Capita State Debt:||$15,965|
|Other state budgets|
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- 1 Budget process
- 2 Expenditures
- 3 Revenues
- 4 State budgets by year
- 5 Historical spending
- 6 State debt
- 7 Federal aid to state budget
- 8 Budget transparency
- 9 Accounting principles
- 10 Contact information
- 11 See also
- 12 External links
- 13 References
- A summary of the budget drafting process
- Trends in expenditures and revenues
- Current and past fiscal year budget developments
- Financial transparency measures
Between fiscal year 2009 and fiscal year 2013, Minnesota's total expenditures increased by approximately $5.868 billion, from $29.898 billion in 2009 to $35.766 billion in 2013. This represents a 19.62 percent increase, outpacing the cumulative rate of inflation during the same period (9.06 percent, calculated using the Consumer Price Indices for January 2009 and January 2013).
- Budget instruction guidelines are sent to state agencies in May and June of the year preceding the start of the new biennium.
- State agencies submit their budget requests to the governor in October.
- Agency hearings are held from September through December.
- The governor submits his or her proposed budget to the state legislature on the fourth Tuesday in January (this deadline is extended to the third Tuesday in February for a newly elected governor).
- The legislature typically adopts a budget in May. A simple majority is required to pass a budget. The biennium begins on July 1 of odd-numbered years.
In Minnesota, the governor may exercise line item veto or item veto of appropriations authority.
The governor is legally required to submit a balanced budget proposal. Likewise, the legislature is legally required to adopt a balanced budget.
Although each state executes its budget process differently, the National Association of State Budget Officers (NASBO) breaks down state expenditures into four general categories. This allows for comparisons among the 50 states. NASBO's categories are as follows:
- General fund: "The predominant fund for financing a state’s operations. Revenues are received from broad-based state taxes. However, there are differences in how specific functions are financed from state to state."
- Other funds: "Expenditures from revenue sources that are restricted by law for particular governmental functions or activities. For example, a gasoline tax dedicated to a highway trust fund would appear in the “Other funds” column. For Medicaid, other state funds include provider taxes, fees, donations, assessments, and local funds."
- Federal funds: "Funds received directly from the federal government."
- Bonds: "Expenditures from the sale of bonds, generally for capital projects."
The table below breaks down expenditures for fiscal year 2013 (comparable figures from surrounding states are provided to give additional context). Figures for all columns except "Per capita expenditures" are rendered in millions of dollars (for example, $2,448 translates to $2,448,000,000). Figures in the column labeled "Per capita expenditures" have not been abbreviated.
|Total state expenditures, FY 2013 ($ in millions)|
|State||General fund||Federal funds||Other funds||Bonds||Total||Per capita expenditures|
| Per capita figures are calculated by taking the state's total expenditures and dividing by the number of state residents according to United States Census estimates.|
Source: National Association of State Budget Officers
Expenditures by function
State expenditures in Minnesota can be further broken down by function (elementary and secondary education, public assistance, etc.). Fiscal year 2012 data is included in the table below (information from neighboring states is provided for additional context). Figures are rendered as percents, indicating the share of the total budget spent per category.
|Expenditures by function, FY 2012 (as percents)|
|State||Elementary and secondary ed.||Higher ed.||Public assistance||Medicaid||Corrections||Transportation||Other|
|Source: National Association of State Budget Officers|
From 2008 to 2012, elementary and secondary education spending fell by 2.60 percentage points, or 9.8 percent, as a share of the budget. During the same period, Medicaid expenditures rose by five percentage points, or 22.1 percent, as a share of the budget. The table below details changes in expenditures from 2008 to 2012. Figures are rendered as percents, indicating the share of the total budget spent per category.
|Expenditures from 2008 to 2012 (as percents)|
|Year||Elementary and secondary ed.||Higher ed.||Public assistance||Medicaid||Corrections||Transportation||Other|
|Change in %||-2.60%||-1.00%||0.10%||5.00%||-0.30%||-0.60%||-0.50%|
|Source: National Association of State Budget Officers|
The table below breaks down general fund revenues by source in fiscal year 2013 (comparable figures from surrounding states are also provided to give additional context). Figures for all columns except "Per capita revenue" are rendered in millions of dollars (for example, $2,448 translates to $2,448,000,000). Figures in the column labeled "Per capita revenue" have not been abbreviated.
|Revenue sources in the general fund, FY 2013 ($ in millions)|
|State||Sales tax||Personal income tax||Corporate income tax||Gaming tax||Other taxes and fees||Total||Per capita revenue**|
| Per capita figures are calculated by taking the state's total revenues and dividing by the number of state residents according to United States Census estimates for 2013.|
Source: National Association of State Budget Officers
The table below details the change in revenue sources in the general fund from 2009 to 2013. Figures for all columns except "Per capita revenue" are rendered in millions of dollars (for example, $2,448 translates to $2,448,000,000). Figures in the column labeled "Per capita revenue" have not been abbreviated.
|Revenue sources in the general fund, Minnesota ($ in millions)|
|Year||Sales tax||Personal income tax||Corporate income tax||Gaming tax||Other taxes and fees||Total||Per capita revenue**|
|Change in %||10.89%||23.77%||64.55%||-9.30%||2.05%||17.84%||14.49%|
| Per capita figures are calculated by taking the state's total revenues and dividing by the number of state residents according to United States Census estimates.|
Source: National Association of State Budget Officers
State budgets by year
On May 23, 2013, Governor Mark Dayton signed into law several bills that together comprised the 2013-2015 biennium budget. Among these was a tax bill designed to raise in excess of $2 billion in new revenues through an income tax increase on wealthy residents, a cigarette tax increase, and the elimination of select corporate subsidies. The new revenues were set to be used for public education spending, property tax relief, and deficit reduction.
The enacted budget is not codified in a single bill, but is rather spread across several appropriations bills. For a summary of state spending in the 2012-2013 and 2014-2015 bienniums, see this series of charts.
- See also: Minnesota state budget (2011-2013)
Fiscal year 2011
- See also: Minnesota state budget (2010-2011)
Fiscal year 2010
- See also: Minnesota state budget (2009-2010)
State budget historical spending below was compiled by the National Association of State Budget Officers. Figures reflect the reported "Total Expenditures" in Table 1. Figures for all columns are rendered in millions of dollars (for example, $2,448 translates to $2,448,000,000).
|Historical state budget spending in Minnesota ($ in millions)|
|Fiscal year||General Fund||Other funds||Federal funds||Bonds||Budget totals|
|Total||% of Budget||Total||% of Budget||Total||% of Budget||Total||% of Budget|
|General Fund: The predominant fund for financing a state’s operations. Revenues are received from broad-based state taxes. However, there are differences in how specific functions are financed from state to state.|
Other funds: Expenditures from revenue sources that are restricted by law for particular governmental functions or activities. For example, a gasoline tax dedicated to a highway trust fund would appear in the “Other funds” column. For Medicaid, other state funds include provider taxes, fees, donations, assessments, and local funds.
Federal funds: Funds received directly from the federal government.
Bonds: Expenditures from the sale of bonds, generally for capital projects.
According to a January 2014 report by the nonprofit organization State Budget Solutions, Minnesota had a state debt of over $85 billion. Its state debt per capita was $15,965. The report revealed that state governments faced a combined $5.1 trillion in debt, 33 percent of annual gross state product. The obligation amounts to $16,178 per capita in the nation. A bulk of the state debt -- 79 percent -- was linked to unfunded public pensions.
|Total state debt in Minnesota|
|Total state debt||$85,879,526,000||20|
|Per capita debt||$15,965||21|
|State and other fund expenditures||$22,550,000,000||29|
A 2012 report from the Pew Center on the States noted that Minnesota's pension system was funded at 80 percent at the close of fiscal year 2010, just on par with the 80 precent funding level experts recommend. Consequently, Pew designated the state's pension system as needing "improvement."
The funding ratio for the state's pension system decreased from 84.24 percent in fiscal year 2007 to 75 percent in fiscal year 2012, a decrease of 9.24 percentage points, or 11 percent. Likewise, unfunded liabilities increased from approximately $9.1 billion in fiscal year 2007 to nearly $16 billion in fiscal year 2012.
States sometimes sell general obligation bonds to investors in order to finance large-scale undertakings (e.g., road construction and other public works projects). Credit rating agencies, such as Standard and Poor's, assign grades to states, evaluating their ability to pay the principal and interest on such bonds. Standard and Poor's grades range from AAA, the highest available, to BBB, the lowest. Generally speaking, a higher credit rating indicates lower risk for an investor, which in turn lowers costs for taxpayers.
The table below lists the Standard and Poor's credit rating for Minnesota from 2001 to 2012 (grades from surrounding states are provided for additional context).
|S&P credit ratings from 2001 to 2012|
|Minnesota||Iowa||North Dakota||South Dakota||Wisconsin|
Federal aid to state budget
- See also: Federal aid to budgets in the 50 states
The chart below notes how much of the state’s general revenues come from the federal government. Figures were calculated by dividing each state’s federal intergovernmental revenue into its general revenue. The number in the rightmost column indicates the state's ranking in relation to the rest of the nation (e.g., if "1," the state receives the highest percentage of federal funding in the nation). Figures from neighboring states are included to provide additional context.
State governments receive aid from the federal government to fund a variety of joint programs, such as Medicaid. Federal aid varies considerably from state to state. For example, Mississippi received approximately $7.7 billion in federal aid in 2012, which accounted for more than 45 percent of the state's general revenues. By contrast, Alaska received roughly $2.9 billion in federal aid in 2012, just under 20 percent of the state's general revenues.
|Federal aid to state budgets in 2012|
|State||Federal aid as % of general revenue||Total federal aid||National rank|
Minnesota received $3.75 billion in federal stimulus funding between February 2009 and June 2013.
|Minnesota transparency website|
|Line item expenditures|
|Public employee salaries|
|Last evaluated in 2009.|
Minnesota launched a spending database in March 2009 (over one year after the mandated launch date). According to an article in The Star Tribune, the Department of Administration had not launched the website because "an old state computer system, which was being updated, was not Internet-friendly. It's not clear if the new computer system would include a spending database because the Legislature didn't appropriate the $1 million to $1.5 million needed for it."
According to a press release from the Office of the Governor, "The site was created by Minnesota Management and Budget (MMB) and offers on-line, round-the-clock access to data on state payments for schools, local governments, contractors and other vendors. With just a few clicks, citizens can access detailed information on most state spending. The data is supplied by the state's accounting system and updated nightly."
The table to the right is helpful in evaluating the level of transparency provided by the state spending database.
Multi-measure budget transparency profile
The Institute of Government and Public Affairs at the University of Illinois created a multi-measure transparency profile for Minnesota, which measured state transparency as of September 2011 using indicators from a range of organizations. These indicators measured both website transparency and other recognized facets of governmental transparency. In addition, IGPA presented four unique indicators of non-transparency based on the observation that transfers or reassignments between general and special funds can obscure the true fiscal condition of a state.
IGPA devised a budget transparency index based on information available from the National Association of State Budget Officers. Minnesota tied for 20th in the nation with 12 other states, earning five out of eight possible points.
|Minnesota - IGPA score for budget process, contents and disclosure|
|Budget transparency indicator||Yes or no?|
|"Generally Accepted Accounting Principles" budget|
|Binding revenue forecast|
|Legislative revenue forecast|
|Constitution or statutory tax/spend limitations|
In addition to the individual state profile, IGPA offers a 50-state comparison and profiles for other states.
U.S. PIRG "Following the Money" report
- See also: Following the Money 2014 Report
The U.S. Public Interest Research Group, a consumer-focused nonprofit organization based in Washington, D.C., released its annual report on state transparency websites in April 2014. The report, entitled "Following the Money," measured how transparent and accountable state websites are with regard to state government spending. According to the report, Minnesota received a grade of D+ and a numerical score of 64, indicating that Minnesota was "lagging" in terms of transparency regarding state spending.
Minnesota auditing authority is divided between the State Auditor and the Legislative Auditor. The Office of the State Auditor is a constitutional office charged with overseeing more than $20 billion spent annually by local governments in Minnesota. The Office of the State Auditor publishes its audit reports online. The Office of the Legislative Auditor audits state agencies and constitutional offices, and also publishes its audit reports online. In addition to the office's primary focus on state agencies and programs, this office also audits three metropolitan agencies and selectively reviews programs that are administered locally.
Minnesota Management and Budget
658 Cedar Street, 400 Centennial Building
St. Paul, Minnesota 55155
- Minnesota government sector lobbying
- Minnesota public pensions
- Governor of Minnesota
- Minnesota State Senate
- Minnesota House of Representatives
- Minnesota State Legislature
- State Budget Solutions, Minnesota
- Taxpayers League of Minnesota
- Center of the American Experiment
- Freedom Foundation of Minnesota
- Official Overview of State Government Spending, 2007
- language of Minnesota House File 548, State Government Omnibus Bill
- U.S. PIRG, "Report: Transparent & Accountable Budgets," April 8, 2014
- The New York Times, "Battles loom in many states over what to do with budget surpluses," February 3, 2014
- Center on Budget and Policy Priorities, "Policy Basics: The ABCs of State Budgets," February 7, 2013
- Gov. Tim Pawlenty, "2010 State of the State Address," February 11, 2010
- Gov. Tim Pawlenty, "2009 State of the State Address," January 15, 2009
- Refers to General Fund spending. Typically in state budgets the General Fund is spending that is most directly controlled by state legislators.
- This figure is derived by calculating the percent difference between the prior two years' spending levels according to the National Association of State Budget Officers.
- Bureau of Labor Statistics, "CPI Detailed Report Data for February 2014," accessed April 9, 2014
- InflationData.com, "Cumulative Inflation Calculator," February 28, 2014
- National Conference of State Legislatures, "State Experiences with Annual and Biennial Budgeting," updated April 2011
- National Association of State Budget Officers, "Budget Processes in the States, Summer 2008," accessed February 21, 2014
- National Association of State Budget Officers "State Expenditure Report, 2011-2013," accessed February 21, 2014
- United States Census Bureau, "Annual Estimates of the Resident Population: April 1, 2010 to July 1, 2013," accessed February 26, 2014
- National Association of State Budget Officers, "State Expenditure Report, 2009-2011," accessed February 24, 2014
- National Association of State Budget Officers, "State Expenditures Report, 2010-2012," accessed February 24, 2014
- National Association of State Budget Officers, "State Expenditure Report, 2009," accessed February 24, 2014
- National Association of State Budget Officers, "State Expenditure Report, 2008," accessed February 24, 2014
- United States Census Bureau, "Vintage 2009: Annual Population Estimates," accessed February 26, 2014
- MPR News, "Budget in hand, Legislature adjourns," May 21, 2013
- Office of the Governor, "Governor Dayton Signs Multiple Bills," May 23, 2013
- Minnesota Legislative Reference Library, "State Budget," accessed April 23, 2014
- State Budget Solutions, "State Budget Solutions' Fourth Annual State Debt Report," January 8, 2014
- Washington Examiner, "EXography: Unfunded public employee pensions drive state debts skyward," January 21, 2014
- State Budget Solutions "State Budget Solutions' Fourth Annual State Debt Report," January 8, 2014
- Pew Center on the States, "Widening Gap Update: Minnesota," June 18, 2012
- Minnesota State Retirement System, "2012 Comprehensive Annual Financial Report," accessed November 26, 2013
- Public Employees Retirement Association of Minnesota, "2012 Comprehensive Annual Financial Report," accessed November 26, 2013
- Teachers Retirement Association of Minnesota, "2012 Comprehensive Annual Financial Report - Financial Section," accessed November 26, 2013
- Stateline: The Daily News Service of The Pew Charitable Trusts, "Infographic: S&P State Credit Ratings, 2001-2012," July 13, 2012
- United States Census Bureau, "State Government Finances: 2012," accessed February 24, 2014
- Recovery.gov, "Stimulus Spending by State," accessed February 21, 2014
- Office of the Governor, "Governor Pawlenty Unveils New State Website to Allow Citizens to Track Government Spending Online," March 26, 2009
- Minnpost.com, "Many states, including Minnesota, lag in putting their spending on the Internet," February 27, 2009
- The Star Tribune, "A blogger's quest: Where's the database?" May 15, 2009
- Institute of Government and Public Affairs at University of Illinois, "Home page," accessed February 21, 2014
- Institute of Government and Public Affairs at University of Illinois, "Budget Transparency Profiles - All 50 States," September 2011
- U.S. Public Interest Research Group, "Following the Money 2014 Report," accessed April 15, 2014
- Minnesota Office of the State Auditor, "Home page," accessed October 27, 2009
- Minnesota Office of the Legislative Auditor, "Home page," accessed October 27, 2009