SAINT PAUL — On Thursday, the Minnesota Management and Budget Department disclosed that the state is poised for a $3.7 billion surplus in the two-year budget concluding in 2025, indicating a notable increase of approximately $1.3 billion from the December projection.
Governor Tim Walz, optimistic about the state’s economic path, asserted, “The numbers speak for themselves of a thriving economy. Minnesota is emerging from the pandemic and global recession, well-positioned for the future.”
The upswing in surplus is credited to unexpectedly strong consumer spending and corporate profit growth. However, the department issued a cautionary note, anticipating potential financial challenges ahead. Despite relatively stable state spending projections, concerns were voiced about possible fiscal obstacles in the future.
While the present budget underscores a solid foundation, officials are cognizant of potential strains on the subsequent two-year budget. There’s a looming prospect of a shortfall nearing $1.5 billion by 2027, prompting calls for fiscal prudence.
MMB Commissioner Erin Campbell stressed the importance of exercising caution in ongoing spending during the legislative session, stating, “Caution should still be exercised this legislative session with regards to ongoing spending.”
State Economist Laura Kalambokidis, acknowledging the positive outlook, drew attention to external factors that could impact the state’s financial trajectory, including international conflicts, inflation fluctuations, and potential delays in the federal budget.
The budget forecast figure will shape discussions in the remaining months of the legislative session.
