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Minnesota officials are projecting a $7.7 billion surplus in the state budget.

Where did all that extra money come from? Much of the projected surplus was thanks to higher-than expected tax revenues. Only $364 million, according to reporting from the Associated Press, was due to lower-than-expected state spending.

That means Minnesota collected more tax money than it needs to operate.

Some of the projected surplus is already spoken for in a contribution to fully fund the state’s $2.7 billion budget reserve.

A surplus is always a good thing. And a full rainy day fund is even better, But a multi-billion dollar overshoot of what we thought we needed to run the state means it’s time to reexamine the policies that led here to ensure we’re leaving as much money as possible where it belongs — at home with the people who earned it.

A measured, long-view approach is called for. While a large surplus can be used to defend slash-and-burn tax-cutting actics in an election season, it’s not wise.

Remember that in February, Minnesota’s budget forecast anticipating a $1.3 billion deficit due to the pandemic had grown to a projected $1.6 billion surplus. In 10 months, that $1.6 billion grew by more than five-fold. So anyone who claims to know for sure what the state’s budget will look like over the remaining 19 months of the budget period is not to be trusted. The accuracy of the forecast will depend on the continuing pandemic, economic outlook and whatever else gets thrown at us in the coming year.

However, huge surpluses during hard times signal that scrutiny is called for. Where possible, using that money to fully fund mandates already on the books (we’re looking at you, special education cross-subsidies) is step one.

Step two should be in finding out which levers of the state machine can be adjusted to reduce the projected monetary stockpile while not jeopardizing state operations.

Step three is making those adjustments to leave more money in the wallets of Minnesotans.

Then, if there’s still bandwidth for more reductions, lawmakers can start to talk about business tax relief.

Of course, evaluation of state spending should be (and is) a constant part of the Legislature’s fiscal oversight. As needs change, so should spending. Where waste is found, it should be eradicated.

Constituents should not expect perfection in this rebalancing, however. The recent past have been overflowing with proof that predicting the future with precision is impossible. And, just like Minnesota families and businesses, it makes sense for the state to have a reasonable financial cushion against uncertainty.

Still, if we’re able to be above water to the tune of more than $7 billion in one of the most tumultuous times of the century, Minnesota needs to look at ways to keep more would-be tax money in the hands of its residents.

— St. Cloud Times, Dec. 11