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. Harry Niska, R-Ramsey , 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.
“Our state’s crumbling bottom line is the direct result of reckless spending and unnecessary tax increases enacted by Democrats in full control of the Capitol the last two years,” Niska said. “You don’t need to be an accountant to comprehend that blowing a state surplus and sending state spending into orbit is a recipe for disaster for our state budget.
“Minnesota Democrats may try to spin the problem they created and shift blame onto President Trump, but it is Democrats themselves who are responsible for driving our state’s budget into the ditch. Remember, we had a projected shortfall of more than $5 billion even before Donald Trump took office. This latest forecast just shows the receipts keep piling up on bad Democrat decisions in St. Paul.”
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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