ST. PAUL – State officials issued an updated economic forecast Thursday and it shows Minnesota’s bottom line continues to decline, with a smaller short-term surplus and a growing deficit on the horizon.
The report from Minnesota Management & Budget reveals a $456 million projected balance for 2026-27, down $160 million from previous estimates. The projected general fund shortfall for the 2028-29 biennium is now $6 billion – $852 million worse than November estimates and nearly a state-record deficit.
State spending growth outpaces revenue growth through projections for fiscal year 2029, MMB indicates. State Rep. Chris Swedzinski, R-Ghent, said this is a dose of reality after Democrats in full control of the Capitol last biennium spent the state’s $18 billion surplus, raised taxes by $10 billion and increased the state budget by 40 percent with the budget they set in 2023.
“We need to do the work now to stabilize our state’s bottom line instead of putting things off until later,” Swedzinski said. “We need to right-size our government that has ballooned with massive spending increases enacted the last few years. Let’s do right by our children. It is good the era of reckless spending, unnecessary tax increases and broken promises we suffered with Democrats in full control of the Capitol the last two years has come to an end.”
The forecast figures will serve as the official framework as legislators work to construct a new two-year state budget before they are scheduled to adjourn in late May.
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