The projected surplus for Fiscal Years 2026-27 is now higher than it was in the November estimate, and no deficit is projected for the next biennium.
“Minnesota’s budget outlook has improved amid significant near-term economic and fiscal uncertainty,” according to the February forecast released Friday by Minnesota Management and Budget (MMB).
The 2026-27 biennium projected balance is now $3.7 billion, $1.3 billion higher than November estimates.
However, spending growth is forecast to outpace revenue growth in the projections through Fiscal Year 2029. The projected General Fund balance for the 2028-29 biennium is now $377 million, but “a significant structural imbalance remains. Shifting policies at the federal level and missing or incomplete data due to recent federal government shutdowns introduce significant uncertainty to the projections,” according to MMB.
Senate Republican Leader Mark Johnson (East Grand Forks) is concerned about the long-term forecast. “While Democrats continue to blame D.C. for Minnesota problems, the reality is that we are spending more than we take in. Short-term surpluses are not enough to cover long-term obligations, and that is a direct result of Democrats’ reckless spending in 2023 and 2024,” Senate Republican Leader Mark Johnson (East Grand Forks) said. “Despite an improved national economic outlook, Minnesota’s economy is stagnant, fraudsters stole billions from Minnesotans in need, and we are paying more in taxes and earning less because of Democrats’ mandates. This forecast requires us to stop the fraud, reduce mandates, and pass tax relief that makes a positive difference to Minnesotans’ budgets.”
