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 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. Joe McDonald, R-Delano, said this underscores the need for balance after Democrats in St. Paul spent the state’s $18 billion surplus, raised taxes by $10 billion and increased the state budget by around 40 percent – pushing two-year state spending from $52 billion to $72 billion with the budget they set in 2023.
“The unsustainable approach taken with our state budget could have major consequences down the road, even if our bottom line looks OK today,” McDonald said. “One-party rule raised state spending by 40 percent, which is completely reckless and will need to be addressed this session.
“Minnesota taxpayers have a right to be concerned that Democrats turned a historic state surplus into a looming shortfall almost overnight, all the while ignoring fraud and waste that is running rampant in our state. The good news is Republicans gained equal power in the House, restoring much-needed balance in St. Paul for the upcoming biennium. The irresponsible actions we saw the last two years are over and a new era will be starting in St. Paul as we focus on doing what’s best for all Minnesotans.”
An updated February forecast will serve as the official framework for the 2025 session as legislators work to craft a new two-year state budget before adjourning in late May.
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