Anderson: Minnesota's bottom line suffers from soaring state spending, ongoing fraud

ST. PAUL – The state issued a new economic forecast Thursday and Rep. Paul Anderson, R-Starbuck, said a significant shortfall looms after a spending and taxing spree took place with one party control at the Capitol two years ago.

The new economic report from Minnesota Management and Budget indicates state’s immediate outlook is in good shape, with a projected surplus of $2.5 billion in the current budget. The next two-year cycle is where things get dicey, Anderson said, with the forecast also revealing a growing structural imbalance and a $3 billion shortfall in 2028-29, so long as the state does not spend any of the current surplus dollars. If the $2.5 billion surplus is spent, the future deficit balloons to $5.4 billion.

This, Anderson said, comes after Democrats in full control of the Capitol increased state spending by 40 percent, used up the state’s $18 billion surplus and raised taxes by $10 billion in 2023.

“It’s good that our short-term budget is on solid ground,” Anderson said. “But that $3 billion shortfall is concerning and should be addressed during the 2026 session to at least lessen the burden when the next state budget is set in 2027. It’s just more evidence of how we still need a more balanced approach at the Capitol to compensate for decisions that were made in the past. Minnesota’s serious fraud problem also is a factor in our weaker outlook, leading to increased spending on state programs. We need to continue working to fix that problem so we can make sure tax dollars reach their intended use.”

A complete state budget was enacted for the 2026-27 biennium last spring. An updated February forecast will serve as the official framework for supplemental budget work in the 2026 session.

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