Minnesota state budget and finances

From Ballotpedia
(Redirected from Minnesota state budget)
Jump to: navigation, search

Minnesota budget and finances
Policypedia Budget Policy-logo-no background.png
General information
Budget calendar:
Biennial
Fiscal year:
2015
State credit rating:
AA+ (as of 2014)
Current governor:
Mark Dayton
Financial figures
Total spending (state and federal funds):
$35.4 billion (estimated for 2014)
Per capita spending:
$6,478.26 (estimated for 2014)
Total state tax collections:
$21.0 billion (2013)
Per capita tax collections:
$3,878.93 (2013)
State debt:
$85.9 billion (as of 2014)
Per capita state debt:
$15,965 (as of 2014)
State budgets and finances
AlabamaAlaskaArizonaArkansasCaliforniaColoradoConnecticutDelawareFloridaGeorgiaHawaiiIdahoIllinoisIndianaIowaKansasKentuckyLouisianaMaineMarylandMassachusettsMichiganMinnesotaMississippiMissouriMontanaNebraskaNevadaNew HampshireNew JerseyNew MexicoNew YorkNorth CarolinaNorth DakotaOhioOklahomaOregonPennsylvaniaRhode IslandSouth CarolinaSouth DakotaTennesseeTexasUtahVermontVirginiaWashingtonWest VirginiaWisconsinWyoming

Horizontal-Policypedia logo-color.png
Total state expendituresState debtTax policy in Minnesota
Note: This page utilizes information from a variety of sources. As such, the currency of the information varies somewhat. The information presented on this page reflects the most recent data available as of February 2015.
Between fiscal years 2013 and 2014, total spending in Minnesota increased by approximately $3.1 billion, from $32.3 billion in fiscal year 2013 to an estimated $35.4 billion in 2014. This represents a 9.6 percent increase. The cumulative rate of inflation during the same period was 1.58 percent, calculated using the Consumer Price Indices for January 2013 and January 2014. As of 2014, financial services firm Standard and Poor's had assigned Minnesota a AA+ credit rating.[1][2][3]
Total state tax collections in Minnesota in 2013 equaled $21 billion. This amounted to $3,878.93 per capita.

Spending

Definitions

The information below comes from the National Association of State Budget Officers (NASBO). These spending figures are broken into three broad categories in order to facilitate comparison between the states.[3]

  • State funds: State funds include general and other state-based funds. A general fund is "the predominant fund for financing a state's operations." Other state funds are "restricted by law for particular governmental functions or activities."
  • Federal funds: Federal funds are "funds received directly from the federal government."
  • Total spending: Total spending is calculated by adding together the totals for state and federal funds.

These figures exclude spending from the sale of bonds.

2014 expenditures

See also: Total state expenditures

The table below breaks down estimated spending totals for fiscal year 2014 (comparable figures from surrounding states are included to provide additional context). Figures for all columns except "Population” and “Per capita spending" are rendered in millions of dollars (for example, $2,448 translates to $2,448,000,000). Figures in the columns labeled "Population” and “Per capita spending" have not been abbreviated.[3]

In Minnesota in fiscal year 2014, total estimated government spending equaled $35.4 billion. Estimated per capita spending was $6,478.

Total estimated state spending, FY 2014 ($ in millions)
State State funds Federal funds Total spending Population Per capita spending
Minnesota $25,861 $9,492 $35,353 5,457,173 $6,478.26
Iowa $13,957 $6,122 $20,079 3,107,126 $6,462.24
North Dakota $5,186 $1,590 $6,776 739,482 $9,163.17
South Dakota $2,669 $1,420 $4,089 853,175 $4,792.69
Wisconsin $33,887 $11,006 $44,893 5,757,564 $7,797.22
Per capita figures are calculated by taking the state's total spending and dividing by the number of state residents according to United States Census estimates.[4]
Source: National Association of State Budget Officers

Spending by function

See also: State spending by function as a percent of total expenditures
Breakdown of spending by function in FY 2013
Source: National Association of State Budget Officers

State spending in Minnesota can be further broken down by function (elementary and secondary education, public assistance, etc.). Fiscal year 2013 information 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.[3]

In Minnesota in fiscal year 2013, K-12 education accounted for 29.2 percent of total state spending, a greater share than in any neighboring state.

State spending by function as a percent of total expenditures, FY 2013
State K-12 education Higher education Public assistance Medicaid Corrections Trans-
portation
Other
Minnesota 29.2% 4.7% 1.4% 24.3% 1.5% 10.7% 28.2%
Iowa 16.4% 26.0% 0.5% 19.8% 2.1% 6.8% 28.3%
North Dakota 15.0% 19.0% 0.1% 13.7% 1.9% 16.1% 34.2%
South Dakota 14.1% 22.3% 0.7% 19.9% 2.5% 15.0% 25.5%
Wisconsin 16.2% 14.3% 0.3% 17.2% 2.9% 6.9% 42.1%
Source: National Association of State Budget Officers
Note: "Other" expenditures include "Children's Health Insurance Program (CHIP), institutional and community care for the mentally ill and developmentally disabled, public health programs, employer contributions to pensions and health benefits, economic development, environmental projects, state police, parks and recreation, housing and general aid to local governments."[3]

Spending trends

Between 2009 and 2013, the share of the Minnesota state budget spent on higher education decreased from 10.4 percent to 4.7 percent. See the table below for further details (figures are rendered as percents, indicating the share of the total budget spent per category).[3][5][6][7][8]

Spending by function from 2009 to 2013 (as percents)
Year K-12 education Higher education Public assistance Medicaid Corrections Transportation Other
2013 29.2% 4.7% 1.4% 24.3% 1.5% 10.7% 28.2%
2012 23.8% 9.7% 1.4% 27.6% 1.5% 8.3% 27.7%
2011 22.9% 10.2% 1.5% 25.3% 1.6% 10.1% 28.4%
2010 21.7% 10.7% 1.5% 25.1% 1.6% 9.8% 29.6%
2009 25.5% 10.4% 1.3% 22.2% 1.7% 9.4% 29.4%
Source: National Association of State Budget Officers
Note: "Other" expenditures include "Children's Health Insurance Program (CHIP), institutional and community care for the mentally ill and developmentally disabled, public health programs, employer contributions to pensions and health benefits, economic development, environmental projects, state police, parks and recreation, housing and general aid to local governments."[3]

Revenues

2013 revenues

See also: State government tax collections by source

The table below breaks down state government tax collections by source in 2013 (comparable figures from surrounding states are also provided to give additional context). Figures for all columns except "population" and "per capita revenue" are rendered in thousands of dollars (for example, $2,448 translates to $2,448,000). Figures in the columns labeled "population" and "per capita revenue" have not been abbreviated).[9]

In Minnesota in 2013, total state tax collections amounted to $21 billion. Per capita tax collections were $3,879.

State tax collections by source ($ in thousands)
State Property taxes Sales and gross receipts Licenses Individual income taxes Corporation net income taxes Other taxes Total 2013 population Per capita collections
Minnesota $821,799 $8,289,780 $1,184,465 $8,950,755 $1,363,128 $421,882 $21,031,809 5,422,060 $3,878.93
Iowa N/A $3,608,991 $798,137 $3,436,758 $428,554 $101,936 $8,374,376 3,092,341 $2,708.10
North Dakota $2,808 $1,763,437 $207,482 $641,766 $225,719 $2,457,558 $5,298,770 723,857 $7,320.19
South Dakota N/A $1,228,262 $257,220 N/A $37,172 $11,009 $1,533,663 845,510 $1,813.89
Wisconsin $148,600 $7,088,411 $1,035,743 $7,227,690 $955,752 $66,416 $16,522,612 5,742,953 $2,877.02
Source: Tax Policy Center, "State Tax Collection Sources 2000-2013," June 20, 2014
Minnesota tax collections by source in 2013
Source: Tax Policy Center

The table below lists 2013 tax collections by source as percentages of total collections. In Minnesota, corporation net income taxes accounted for 6.5 percent of total state tax collections, a greater share than in any neighboring state.[9]

State tax collections by source (as percentages)
State Property taxes Sales and gross receipts Licenses Individual income taxes Corporation net income taxes Other taxes
Minnesota 3.91% 39.42% 5.63% 42.56% 6.48% 2.01%
Iowa N/A 43.1% 9.53% 41.04% 5.12% 1.22%
North Dakota 0.05% 33.28% 3.92% 12.11% 4.26% 46.38%
South Dakota N/A 80.09% 16.77% N/A 2.42% 0.72%
Wisconsin 0.9% 42.9% 6.27% 43.74% 5.78% 0.4%
Source: Tax Policy Center, "State Tax Collection Sources 2000-2013," June 20, 2014

Current fiscal year budget

See also: Historic Minnesota budget and finance information

Biennium 2014-2015

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.[10][11]

The enacted budget is not codified in a single bill, but is rather spread across several appropriations bills.[12] For a summary of state spending in the 2012-2013 and 2014-2015 bienniums, see this series of charts.

On May 20, 2014, Dayton signed into law a supplemental budget for the biennium, which called for an additional $283 million in spending. The supplemental budget can be accessed here.[13]

State debt

See also: State debt

According to a January 2014 report by the nonprofit organization State Budget Solutions, Minnesota had a state debt of approximately $85.9 billion. Its state debt per capita was $15,965. The report revealed that state governments faced a combined $5.1 trillion in debt. The obligation amounted to $16,178 per capita in the nation.[14]

Total state debt, 2014
State Total state debt State debt per capita Per capita debt ranking
Minnesota $85,879,526,000 $15,965 21
Iowa $37,783,060,000 $12,290 38
North Dakota $9,263,742,000 $13,241 30
South Dakota $7,707,458,000 $9,249 46
Wisconsin $45,026,643,000 $7,863 47
Sources: State Budget Solutions, "State Budget Solutions' Fourth Annual State Debt Report," January 8, 2014

Public pensions

See also: Minnesota public pensions and Minnesota public employee salaries

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."[15]

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.[16][17][18]

Credit ratings

See also: State credit ratings

Credit rating agencies, such as Standard and Poor's, assign grades to states that take into account a state's ability to pay debts and the general health of the state's economy. Generally speaking, a higher credit rating indicates lower interest costs on the general obligation bonds states sometimes sell to investors in order to finance large-scale undertakings (e.g., road construction and other public works projects). This in turn results in lower interest costs, thereby lowering the cost to taxpayers.[19][20]

The table below lists the Standard and Poor's credit ratings for Minnesota and surrounding states from 2004 to 2014. Standard and Poor's grades range from AAA, the highest available, to BBB, the lowest.[21]

State credit ratings, 2004 to 2014
State 2014 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004
Minnesota AA+ AA+ AA+ AAA AAA AAA AAA AAA AAA AAA AAA
Iowa AAA AAA AAA AAA AAA AAA AAA AA+ AA+ AA+ AA+
North Dakota AAA AAA AA+ AA+ AA+ AA+ AA AA AA AA AA-
South Dakota AA+ AA+ AA+ AA+ AA AA AA AA AA
Wisconsin AA AA AA AA AA AA AA AA- AA- AA- AA-
Source: Stateline: The Daily News Service of The Pew Charitable Trusts, "Infographic: S&P State Credit Ratings, 2001-2014," June 9, 2014

Federal aid to state budget

See also: Federal aid to state budgets

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.[22]

The table below notes what share of Minnesota’s general revenues came from the federal government in 2012. That year, Minnesota received approximately $9.6 billion in federal aid, 28.1 percent of the state's total general revenues. Figures from surrounding states are provided for additional context.[22]

Federal aid to state budgets, 2012
State Total federal aid ($ in thousands) Federal aid as a % of general revenue Ranking
Minnesota $9,608,018 28.13% 39
Iowa $6,073,376 33.08% 26
North Dakota $1,750,134 24.76% 45
South Dakota $1,630,220 40.84% 4
Wisconsin $8,855,079 28.19% 38
Source: United States Census Bureau, "State Government Finances: 2012," accessed February 24, 2014

Stimulus

Minnesota received $3.75 billion in federal stimulus funding between February 2009 and June 2013.[23]

Budget process

The state operates on a biennial budget cycle. The sequence of key events in the budget process is as follows:[24][25]

  1. Budget instruction guidelines are sent to state agencies in May and June of the year preceding the start of the new biennium.
  2. State agencies submit their budget requests to the governor in October.
  3. Agency hearings are held from September through December.
  4. 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).
  5. 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.

Minnesota is one of 44 states in which the governor has line item veto authority.[25]

The governor is legally required to submit a balanced budget proposal. Likewise, the legislature is legally required to adopt a balanced budget.[25]

Agencies, offices and committees

The following standing committees in the Minnesota State Legislature deal with budget and finance matters:[26][27]

  1. Taxes Committee, Minnesota House of Representatives
  2. Ways and Means Committee, Minnesota House of Representatives
  3. Finance Committee, Minnesota State Senate

The Minnesota State Auditor is a constitutional officer charged with overseeing spending by local governments. The Minnesota Legislative Auditor audits state agencies and constitutional offices. Both auditing authorities publish their audit reports online[28][29]

Studies and reports

U.S. PIRG "Following the Money" report

See also: "Following the Money" report, 2014

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.[30] 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.[30]

Budget and finance ballot measures

See also: Spending and finance on the ballot and List of Minnesota ballot measures

Ballotpedia has tracked 22 ballot measures relating to state and local budget and financial matters in Minnesota.

  1. Minnesota Borrow School Funds, Amendment 5 (1896)
  2. Minnesota Consolidate Swamp Land and Permanent School Funds, Amendment 1 (1962)
  3. Minnesota Debt Limit of Municipalities, Amendment 1 (1900)
  4. Minnesota Debt Limit of Municipalities, Amendment 1 (1904)
  5. Minnesota Expenditures to Prevent Forest Fires, Amendment 5 (1924)
  6. Minnesota Forestry Management Funds, Amendment 1 (1950)
  7. Minnesota Fund to Improve State School Land, Amendment 1 (1916)
  8. Minnesota Fund to Improve State School Land, Amendment 3 (1914)
  9. Minnesota Highway Funding, Amendment 2 (1956)
  10. Minnesota Increase Debt Limit of Municipalities, Amendment 3 (1902)
  11. Minnesota Investing School Funds, Amendment 3 (1875)
  12. Minnesota Loans for Asylum Buildings, Amendment 1 (1872)
  13. Minnesota Loans for Asylum Buildings, Amendment 2 (1871)
  14. Minnesota Railroad Loans, Amendment 1 (April 1858)
  15. Minnesota Road and Bridge Fund, Amendment 4 (1898)
  16. Minnesota Safekeeping of Public Funds, Amendment 4 (1873)
  17. Minnesota Sale of Internal Improvement Lands, Amendment 3 (1868)
  18. Minnesota Sale of Internal Improvement Lands, Amendment 4 (1872)
  19. Minnesota Sale of Lands for Railroad Bonds, Amendment 6 (1877)
  20. Minnesota Sale of Swamp Lands, Amendment 5 (1881)
  21. Minnesota School Funds Loans, Amendment 1 (1886)
  22. Minnesota State Debts for Public Improvements, Amendment 2 (1962)

Recent news

This section displays the most recent stories in a Google news search for the term "Minnesota + budget"

All stories may not be relevant to this page due to the nature of the search engine.

Minnesota state budget news feed

  • Loading...

Contact information

Minnesota Management and Budget
658 Cedar Street, 400 Centennial Building
St. Paul, Minnesota 55155
Telephone: 651-201-8000

See also

External links

Additional reading

References

  1. Bureau of Labor Statistics, "CPI Detailed Report Data for February 2014," accessed April 9, 2014
  2. InflationData.com, "Cumulative Inflation Calculator," February 28, 2014
  3. 3.0 3.1 3.2 3.3 3.4 3.5 3.6 National Association of State Budget Officers, "State Expenditure Report: 2012-2014," accessed February 18, 2015
  4. United States Census Bureau, "State and County QuickFacts," accessed February 23, 2014
  5. National Association of State Budget Officers, "State Expenditure Report, 2009-2011," accessed February 24, 2014
  6. National Association of State Budget Officers, "State Expenditures Report, 2010-2012," accessed February 24, 2014
  7. National Association of State Budget Officers, "State Expenditure Report, 2009," accessed February 24, 2014
  8. National Association of State Budget Officers, "State Expenditure Report, 2008," accessed February 24, 2014
  9. 9.0 9.1 Tax Policy Center, "State Tax Collection Sources 2000-2013," June 20, 2014
  10. MPR News, "Budget in hand, Legislature adjourns," May 21, 2013
  11. Office of the Governor, "Governor Dayton Signs Multiple Bills," May 23, 2013
  12. Minnesota Legislative Reference Library, "State Budget," accessed April 23, 2014
  13. National Association of State Budget Officers, "Summaries of Fiscal Year 2015 Proposed and Enacted Budgets," July 11, 2014
  14. State Budget Solutions, "State Budget Solutions' Fourth Annual State Debt Report," January 8, 2014
  15. Pew Center on the States, "Widening Gap Update: Minnesota," June 18, 2012
  16. Minnesota State Retirement System, "2012 Comprehensive Annual Financial Report," accessed November 26, 2013
  17. Public Employees Retirement Association of Minnesota, "2012 Comprehensive Annual Financial Report," accessed November 26, 2013
  18. Teachers Retirement Association of Minnesota, "2012 Comprehensive Annual Financial Report - Financial Section," accessed November 26, 2013
  19. Stateline: The Daily News Service of The Pew Charitable Trusts, "Infographic: S&P State Credit Ratings, 2001-2012," July 13, 2012
  20. Bankrate, "The 6 states with the worst credit ratings," September 27, 2012
  21. Stateline: The Daily News Service of The Pew Charitable Trusts, "Infographic: S&P State Credit Ratings, 2001-2014," June 9, 2014
  22. 22.0 22.1 United States Census Bureau, "State Government Finances: 2012," accessed February 24, 2014
  23. Recovery.gov, "Stimulus Spending by State," accessed February 21, 2014
  24. National Conference of State Legislatures, "State Experiences with Annual and Biennial Budgeting," updated April 2011
  25. 25.0 25.1 25.2 National Association of State Budget Officers, "Budget Processes in the States, Summer 2008," accessed February 21, 2014
  26. Minnesota House of Representatives, "House Committees 2015 - 2016," accessed March 20, 2015
  27. Minnesota Senate, "Minnesota Senate Committees," accessed March 20, 2015
  28. Minnesota Office of the State Auditor, "Home page," accessed October 27, 2009
  29. Minnesota Office of the Legislative Auditor, "Home page," accessed October 27, 2009
  30. 30.0 30.1 U.S. Public Interest Research Group, "Following the Money 2014 Report," accessed April 15, 2014