ST. PAUL – The state issued a new economic forecast Wednesday, projecting a $616 million surplus through the 2026-27 biennium – a decrease of $1.1 billion from previous estimates – and a significant future shortfall.
The new economic report from Minnesota Management and Budget indicates reductions in income and sales tax revenues combined with higher spending for long-term care and special education result in a growing potential shortfall in the future. It also reveals a deficit of more than $5 billion through the 2028-29 biennium.
State Rep. Dave Baker, R-Willmar, said this underscores the need for balance after Democrats used full control of the Capitol to spend the state’s previous $18 billion surplus, raise taxes by $10 billion and increase the state budget by 40 percent with the budget they set in 2023.
“While our short-term budget outlook shows a small surplus, I am very concerned about the state’s projected $5.1 billion deficit beginning in just a few short years,” said Rep. Baker. “This massive budget deficit makes clear the consequences of single-party control of state government and the irresponsible and reckless budgeting from Democrats the last two years. It’s extraordinary to think that just a few years ago, Minnesota had the largest budget surplus in our state’s history. Now, we’re looking at one of the largest deficits in years.
“Thankfully, Minnesotans voted in November to end one-party control in St. Paul and House Republicans are ready to get to work reining in out-of-control spending and rooting out waste, fraud, and abuse in state government. Minnesotans deserve a responsible budget that puts their families first and only funds programs that have a proven track record of delivering results.”
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