ST. PAUL – The state issued a new economic forecast Wednesday, projecting a $2.4 billion surplus in Minnesota for the current biennium – and a possible shortfall down the road.
The new economic report indicates the surplus is an increase of $808 million from the end of the 2023 legislative session, driven by higher collections of taxes and fees. Officials also report the current projected $2.4 billion surplus will be consumed by higher spending already in law over next two years, raising questions over a potential shortfall for the biennium starting in July 2025.
State Rep. Dean Urdahl, R-Acton Township, said this news underscores the need for balance in St. Paul after Democrats last May raised taxes by $10 billion and increased state spending by 40 percent despite a $17.5 billion state surplus.
“The one-party rule in St. Paul went too far with historic increases in both taxing and spending and now reality is setting in,” Urdahl said. “It’s rather concerning to think that in just a few short months the majority took our state from a $17.5 billion surplus to facing a potential shortfall. In fact, the new economic forecast resorts to an accounting gimmick – spending the $2.8 billion Rainy Day Fund – to keep our state in the black or a shortfall already would be showing for the next biennium. This path is not sustainable, and we need more balance in St. Paul to do the work of the people and get our state back on track.”
A complete state budget was enacted for the current biennium last spring. An updated February forecast will serve as the official fiscal legislative framework for the 2024 session.