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. Shane Mekeland, R-Clear Lake, 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.
“You can look at this report and might think things are fine for now, but we can’t ignore the financial crisis Democrats created when they had full control of the Capitol during the last biennium,” Mekeland said. "The spending spree they went on is simply unsustainable, increasing the state budget by 40% with giveaways left and right, including free health care and education to illegal aliens.
“We cannot take another dime from hardworking Minnesotans and need to focus on cleaning up the mess caused by one-party control in St. Paul. The good news is balance has been restored with House Republicans breaking up the one-party chokehold Democrats had on our state the last two years. The auto-pilot budget increases and the endless growth of government are coming 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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