ST. PAUL, Minn. - Minnesota finance officials are predicting a state budget surplus of more than $1 billion.
That estimate released Thursday means the state can fully pay the remaining IOUs to public schools that piled up during tougher budget times. And it leaves $825 million left for lawmakers to work with during their election-year session.
The Department of Minnesota Management and Budget's comprehensive review of tax-and-spending patterns will help set expectations for the session that starts in February.
Gov. Mark Dayton and lawmakers from both parties planned to address the report at news conferences.
Dayton says the $1 billion surplus should be used to repeal three controversial planned sales tax increases and for middle class tax relief.
The first $246 million of the budget surplus that state officials announced Thursday goes to settling remaining IOUs to schools. That leaves $825 million for new tax cuts or spending increases.
Dayton says at a Capitol news conference that $231 million of the surplus should be used to repeal sales tax hikes on farm equipment repairs, telecommunications supplies and commercial warehousing services that are scheduled to take effect next April 1. He says another $205 million should go to middle class tax cuts.
Dayton says he won't propose any new spending at least until after an updated budget forecast in February.
The state is also replenishing an airport account from which lawmakers diverted $15 million five years ago.
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