SAINT PAUL — Minnesota Management and Budget (MMB) officials announced Wednesday that the state’s financial outlook has worsened ahead of the upcoming legislative session. The November 2024 Budget and Economic Forecast projects a $616 million surplus for the FY26-27 biennium, a $1.1 billion drop from prior estimates, attributed to declining income and sales tax revenues and rising expenditures for long-term care and special education.
The state had previously passed a historic $72 billion two-year budget in 2023, fueled by a record $17 billion surplus. However, the new forecast signals a growing structural imbalance, adding complexity to lawmakers’ task of crafting the next biennial budget, which takes effect July 1, 2025.
A revised forecast in February will provide updated fiscal data for lawmakers, who must finalize the budget by May 19.
Further complicating the process is the 67-67 split in the House of Representatives following November’s elections, raising questions about how the chamber will function during budget negotiations.
