ST. PAUL – Minnesota’s financial experts recently provided an economic update for our state, and State Representative Steve Jacob (R-Altura) said the analysis included pros and cons.
“While Minnesota does have a budget surplus for the upcoming budget cycle, it is a lot smaller than originally predicted,” Jacob said. “Worse, we are now projected to see a significant budget deficit two years from now, and this is thanks to the outrageous tax and spend choices made last session by a Democrat-controlled state government.”
In February, Minnesota was expected to see a $1.7 billion budget surplus for the upcoming 2026-27 biennium. But due to projected reductions in income and sales tax revenues and higher spending for long-term care and special education, only a $616 million positive balance remains.
Jacob said the real financial trouble begins in Fiscal Year 2028-29. Minnesota’s fiscal analysts note for that budget cycle, a $5.1 billion budget deficit is expected.
Jacob noted that state spending dramatically increased after the legislative Democrat majority and Governor Walz agreed on last session’s budget. At that time, Minnesota had a nearly $20 billion budget surplus. In addition to spending the surplus, the majority party also voted to raise taxes by another $10 billion. By the time session ended, Minnesota’s budget spending increased by 40% when compared to spending in the previous two-year budget cycle.
“At a time when Minnesotans were struggling financially, Democrats wasted a $20 billion surplus and raised taxes besides, and the end result is a multi-billion dollar budget deficit two years from now,” Jacob said. “It’s time to bring some common sense back to state government, as we need to eliminate the waste, fraud and abuse we’re seeing in government programs and stop the nonsensical overspending of your tax dollars.”
While the November forecast gives lawmakers an updated roadmap for Minnesota’s economic projections, Jacob said an update given this February will serve as the official fiscal legislative framework for the 2025 session.