(Editor’s Note: The following column was submitted by Rep. Shane Mekeland.)

A new economic forecast recently issued for Minnesota projects a state record $7.7 billion budget surplus for the next two-year budget cycle.

That’s $7.7 billion – with a “B” – and it marks a dramatic turnaround from last year when there were mounting concerns our economy was falling off a cliff amid COVID-19 restrictions.

To the contrary, the latest report from Minnesota Management & Budget projection indicates “strong growth in income, consumer spending and corporate profits drove extraordinary revenue growth in FY 2021, and higher tax receipts to date in FY 2022 combine with an improved outlook for income, consumer spending and corporate profits to raise the revenue forecast for the current biennium.”

Another factor is state spending is projected to actually decrease in some areas. For example, K-12 education – the largest single item in the state’s budget – is forecast to experience reduced spending of over $300 million. This is due, in part, to many families taking their children out of public schools and enrolling them elsewhere. It will be interesting to see if this is just a pandemic-related blip on the radar or a long-term trend.

Before we get into some of the other takeaways from our state’s abundance of revenue, we should note this is only a forecast and much can happen between now and the June 30 end of the fiscal year.

That said, this massive surplus presents an opportunity to provide Minnesotans with meaningful tax relief during the 2022 session. And, while it should go without saying, $7.7 billion in overcollected taxes should put to rest any proposals to raise taxes in the 2022 legislative session. Especially since inflation is at 30-year highs, gas prices are up 50 percent or more, utility bills are on the rise and simply putting food on the table costs more these days.

I am interested to hear from constituents regarding what we can do to provide maximum tax relief. Some people are advocating for full-on rebates. Bills will be presented to do that, even though the odds of passing such legislation seem quite slim given the current makeup of power at the Capitol.

Until the stars align, maybe a more realistic place we could start would be to reduce – or, better yet, completely eliminate – the burdensome Social Security taxes our state places on senior citizens. Minnesota is an outlier in its taxation of these benefits for seniors as just one of 13 states to do so. We made progress by eliminating Social Security taxes for 250,000-plus Minnesotans in 2017, but it is time to finish the job.

A state surplus also should make it easier to spare our businesses from suffering an increase of 15 percent or more on Unemployment Insurance after record-setting claims depleted Minnesota’s UI Trust Fund.

There’s no reason to allow businesses already struggling with inflation and supply chain issues to suffer tax increases when Minnesota has more than $1 billion in COVID relief money available on top of its $7.7 billion surplus. Small businesses are the backbone of our economy and it’s not right to strap them with debt that accumulated largely because of restrictions placed upon them. Our mom-and-pop shops are still trying to dig out of the hole they were put in and the least we can do is prevent them from suffering a tax increase.

These are just some ways we could relieve the burden on Minnesotans instead of committing taxpayers to more long-term commitments by further expanding government. This discussion will be one to follow in the upcoming session.