The Latest: GOP prizes tax cuts with growing surplus

ST. PAUL, Minn. – The Latest on Minnesota’s $1.65 billion budget surplus and how lawmakers plan to handle it (all times local):

12:25 p.m.

Republicans who control the Legislature say tax relief is their top priority with a $1.65 billion budget surplus.

Tuesday’s newest estimate of the size of the state’s surplus sets of the Legislature’s budget-setting work for the year. They have until late May to pass a new, two-year state budget.

The increase from previous estimates of $1.4 billion surplus gives lawmakers and Democratic Gov. Mark Dayton more money to haggle over. Republicans say tax cuts should get first billing because a tax bill hasn’t passed for several years.

House Speaker Kurt Daudt says the growing surplus is evidence that the state has collected too much in taxes. Top GOP leaders offered few suggestions for which tax cuts or credits may be in their plans.

12:05 p.m.

Gov. Mark Dayton says uncertainty about how President Donald Trump’s administration will proceed means Minnesota lawmakers need to be cautious while setting a budget.

State budget officials said Tuesday that the state’s budget surplus had grown from an estimated $1.4 billion to $1.65 billion. It marks the fourth straight year the state has posted a budget surplus after years of shortfalls.

But despite the good financial news, Dayton and other officials warn that the federal uncertainty on health care, trade and other issues poses potential problems. Dayton says Minnesota lawmakers may need to set aside extra money to cover unforeseen costs from future federal law changes but he’s not sure what amount may be necessary.

Minnesota has socked away more than $2 billion in a budgetary reserve fund.

9:20 a.m.

Minnesota’s projected budget surplus has grown to more than $1.65 billion.

State budget officials released the updated figures Tuesday. Lawmakers had previously been expecting a $1.4 billion budget surplus.

The revised estimate kicks off the Legislature’s budget-setting process at the Capitol this year. They’ll need to approve a new budget before adjourning in late May.

But there have already been signs that it won’t be easy. Gov. Mark Dayton has proposed a nearly $46 billion, two-year budget that Republicans say increases spending too much.

And GOP lawmakers who control the Legislature have signalled they’ll press the Democratic governor for a hefty tax relief package after two years without tax cuts. Dayton previously lined up roughly $300 million in tax relief.

6 a.m.

Tuesday is a big day for Minnesota lawmakers getting ready to write the state budget — they’ll get a new update on how much money they have to work with.

It’s the last financial snapshot before legislators decide on lots of competing needs and wishes.

Gov. Mark Dayton has said he expects little change from the projected $1.4 billion surplus from November.

He wants continue to put money into early education and save some of the money to prepare the state for future economic downturns.

The Republican-led Legislature wants to cut taxes and spent some of the surplus on things like state infrastructure.