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. Bernie Perryman, R-St. Cloud, 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.
“It’s good that our economic outlook is solid for the near future, but that does not hide the fact we need to make some common-sense changes to prevent a massive shortfall in the future,” Perryman said. “We can’t continue to take more from families and businesses already struggling with rising costs. With House Republicans having broken up one-party control, we now can take a more balanced approach to budgeting this session.
“I look forward to addressing this issue and working toward a bipartisan solution that serves all Minnesotans. This is a big mess to clean up, but we can get it done if we keep our eye on the ball and focus on doing what’s best for the people of our state.”
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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