$17.6 Billion Projected State Budget Surplus Fuels Labor’s Calls for Significant State Investments

SAINT PAUL — The latest Minnesota state budget forecast, announced December 6, projects a historic budget surplus of $17.6 billion for the 2024-2025 fiscal year.

That number will be foremost in everyone’s minds when the Minnesota legislature convenes January 3.

With the re-election of Governor Tim Walz and DFL majorities in both the Minnesota House and Minnesota Senate, the stage is set for significant state investments in public education, health care, infrastructure and other needs.

In a statement, Minnesota AFL-CIO president Bernie Burnham said: “[The] budget news puts our state in a good position for what will likely be a historic legislative session for working Minnesotans. With billions in unallocated funds, lawmakers will have more flexibility to make key investments for working people in every corner of our state while working to close Minnesota’s persistent racial and economic disparities.”

“Even with inflation factored in, something that lawmakers should include in future budget forecasts, Minnesota has the abundant resources to make the transformative changes working people have long advocated for,” Burnham said.

She added: “For years, the GOP Senate majority stood in the way of paid family and medical leave for every worker, investing in job-creating infrastructure, fully-funding our schools, healthcare, and vital public services. Now, with pro-labor majorities in both chambers, Governor Walz and lawmakers have an opportunity to make Minnesota a place where workers and families, no matter where we live or what we look like, can prosper for years to come.”

“Minnesota’s union members are excited about the opportunity to partner with state leaders to build a more just and equitable state — with no exceptions,” Burnham said.

Denise Specht, president of Education Minnesota, the state’s teachers union, observed, “the governor and Legislature have a huge budget surplus because at the end of the last session they failed to spend billions of dollars on the things that benefit all Minnesotans, including public education where schools are understaffed and students are struggling.” 

The November 8 election results showed “the voters rejected the Republican Party’s strategy of obstruction and forced austerity,” Specht said. “Now it’s time for Governor Tim Walz and the leadership in the House and Senate to spend the state’s resources to improve the lives of working Minnesotans.” 

“Minnesota schools are chronically underfunded,” Specht said. “To give students more time with their educators, healthy learning environments and access to a sufficient number of professional educators of all kinds, the state needs to make up for funding lost to inflation and then go farther to create world-class schools for all Minnesota students — no matter what they look like, where they come from or where they live. It will require a multi-billion-dollar, multi-year commitment from the state.”

Echoing Specht’s views was Kelly Gibbons, executive director of SEIU Local 284, which represents more than 10,000 school employees across the state who work as paras, school bus drivers, custodians, office staff, food service workers.

Gibbons said: “It’s time we fix the staffing shortages that are hurting students across the state. We need elected officials to finally deliver on Unemployment Insurance so hourly school workers finally have the same safety net as nearly all other workers. We lose too many bus drivers, paras and more because they can’t make ends meet with the current system. We also have a chance to deliver transformational change by passing the Education Support Professionals Bill of Rights, helping to make sure these essential jobs are finally treated with the dignity and respect they deserve. It’s time for action.”

SEIU Healthcare Minnesota & Iowa called for state investment in healthcare workers. “This projected surplus gives our state the chance to provide long overdue funding to support the healthcare workers who helped keep Minnesota families safe and healthy during the darkest days of the pandemic,” said president Jaime Gulley. “The home care field is currently facing huge worker shortages because of the low pay and benefits, causing Minnesota seniors and people with disabilities to not get the care they need.”

“This surplus gives Governor Walz and his administration the chance to make historic investments that will improve the lives of millions of Minnesotans,” Gulley said. “Home care workers and clients are currently bargaining with the state to raise wages above $20, provide overtime and retirement benefits, and ensure we are providing support for these essential workers. It’s time to make sure frontline care workers are finally respected, protected and paid.”

Another major area where significant state investment is sorely needed: infrastructure.

“Now is the time for our state leaders to make substantial structural investments in transportation and water infrastructure,” said Joel Smith, LIUNA Minnesota and North Dakota president and business manager. “We must fix our aging infrastructure as it is an increasing threat to the health and safety of our people and the prosperity of our state.”

An infrastructure investment also is an investment in jobs, Smith noted. “Making these necessary infrastructure investments will also create construction careers for a generation of Laborers.”