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 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. Harry Niska, R-Ramsey, said this underscores the need for balance after Democrats in St. Paul spent the state’s nearly $20 billion surplus, raised taxes by $10 billion and increased the state budget by 40 percent with the budget they set in 2023.
“This is exactly what Minnesota Republicans have been worried about with the Democrat trifecta's explosion of new spending, taxes, and regulation the last two years,” Niska said. “Their irresponsible budget and anti-business policies have set Minnesota on a precarious path. We need a course correction ASAP. The good news is Republicans gained equal power in the House, breaking up one-party control of the Capitol and restoring much-needed balance for the upcoming biennium.”
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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