Propelled by a rebounding economy that is outperforming the nation, Minnesota received its best economic forecast in years — a $1.08 billion surplus.

While the news is tremendous, it’s only the state’s first step forward on a path toward long-term financial stability. Legislators should resist the temptation to go overboard on spending or tax cuts, no matter how well intentioned, until the state secures its finances for the long term.

One way to help protect the state is to build a bigger reserve, which has remained the same since the late 1990s even as the state budget has grown 65 percent bigger. Bonding agencies have said the state’s reserves are inadequate given the volatility of today’s economy — a view shared by the Minnesota Budget Trends Study Commission, which in 2009 recommended a $2.1 billion reserve. The state, which was swimming in red ink at the time, was in no shape to heed that recommendation, but times have changed. Now there’s an opportunity to build a strong enough reserve to weather unpredictable economic storms.

And there are plenty of hazards ahead. Minnesota’s economy is still vulnerable to decisions made at the federal level. Global Insight, the state’s economic consulting firm, assigns a 20-percent probability to a more pessimistic scenario where there is “unwarranted fiscal tightening” in Washington and a global economic crisis.

One of the key concerns is another protracted fight over the debt ceiling early next year. Congress bought a few months time when they reached an agreement to end this year’s government, but the debt ceiling could be back on the docket as soon as March.

A political stalemate over the debt ceiling could be catastrophic for the nation’s economy, the International Monetary Fund has warned. In a paper published in August, the fund quantified potential economic impacts from a shock similar to one in August 2011 when Congress spooked investors by waiting until the eleventh hour to raise the debt ceiling.

Another potential setback could occur if Congress decides not to extend unemployment benefits for those out of work as the nation tries to recover from a deep recession.

But it’s not just federal uncertainty that could cloud Minnesota’s economic security.

Lawmakers, eager to restore funding for programs or roll back tax cuts, could also put the state at risk if they use up the surplus and the state doesn’t maintain a strong enough reserve to handle unpredictable downturns in the state’s economy.

Gov. Dayton already announced that he would like to eliminate three business sales taxes created earlier in the year and is also eyeing tax breaks for middle-income families.

While state Rep. David Dill, DFL-Crane Lake, and state Sen. Tom Bakk, DFL-Cook, also see some uses for the surplus, they cautioned restraint. Both indicated they would like to see the state shore up its reserves to better position the state for other unexpected downturns in the economy.

We would join them in urging the state to proceed cautiously. Although the forecast is welcome news, the state will have a better handle on how much money it truly has when the state’s next economic forecast is released in February. Even if that forecast indicates a surplus, the state needs to take steps to ensure long-term financial stability. That’s the best way to protect Minnesota and its valued investments in health, education, public safety and other services from being jeopardized when the next economic storm hits.