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.
Representative Spencer Igo, R-Wabana Township, said this underscores the need for balance after full Democrat control of St. Paul saw the state’s surplus go from a record setting $18 billion just two years ago to a projected $5.1 billion deficit.
“Wednesday’s budget forecast underscores the need for a course correction in St. Paul and a return to commonsense budgeting practices that put Minnesotans and their families first,” said Rep. Igo. “I look forward to getting to work with a new legislature in January, finding ways to make government more efficient and cost-effective, in hopes of better serving the needs of Minnesotans. An important first step will be addressing the rampant waste, fraud, and abuse in government programs and looking for other opportunities to address automatic spending increases and more.”
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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