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. Jeff Backer, R-Browns Valley, 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.
“Today’s news makes clear that a course correction is needed ASAP to put Minnesota’s fiscal and economic outlook back on the right track,” said Rep. Backer. “With full Democrat control of St. Paul coming to an end in January, the years of automatic spending increases, thousands of new government employees, and billions of dollars lost to waste, fraud, and abuse are over. Minnesotans voted to return commonsense to St. Paul and that’s exactly what House Republicans will bring.”
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