MN Has $3.7B Surplus For 2024, But Looming Deficit Spells Trouble

ST. PAUL, MN — Minnesota’s budget and economic outlook remain stable in the current biennium, but a possible deficit still looms, the state Management and Budget Office said Thursday.

Minnesota has a projected surplus of $3.715 billion, an increase of $1.324 billion compared to November projections. That's thanks to increased tax revenue and stable spending.

But looming trouble is on the horizon. State economists Thursday also projected a $1.5 billion budget "imbalance," or a deficit, for the 2026-27 fiscal year.

In other words, the surplus for the current budget cycle (2024-25) could be wiped out by the projected deficit in the next budget cycle (2026-27) unless legislators scale back on spending.

"Today’s forecast shows Minnesota’s budget is still on the verge of a deficit thanks to Democrats’ irresponsible and unaffordable spending spree last year,” wrote Republican House Minority Leader Lisa Demuthsees.

"Last session, the majority spent the entire $17.5 billion surplus and raised another $10 billion in taxes on Minnesotans to fuel a massive 40 percent growth in government. Minnesotans deserve better. We should be looking for ways to scale back wasteful spending, exercise restraint this year, and budget responsibly instead of continuing the reckless spending spree from last session."

Democrats, who hold a majority in the state House and Senate and control the governor's mansion, focused on the positive from Thursday's news.

"Today’s budget forecast shows that Democratic leadership has Minnesota on the right path. Our economy continues to outpace expectations and our financial future is stable," Democratic House Speaker Melissa Hortman said in a statement.

"The budget Democrats enacted during the historically productive 2023 Legislative Session has laid the groundwork for long-term prosperity, a growing middle class, and a future where every Minnesotan has the opportunity to succeed and build a better life."

View MMB's full presentation on the latest budget forecast here.