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. Paul Anderson, R-Starbuck, 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.
“According to a recent poll, Minnesotans wanted more tax relief and bigger rebate checks from last year's legislative session,” Anderson said. “This new economic report should not change the fact tax relief is in order for Minnesotans to lessen the burden we are all suffering with higher prices in today’s economy. That said, the fiscal imbalance and cloudy long-term outlook for our state also is a call to make smart adjustments to spending. The fact we have rapidly gone from a $17.5 billion surplus to a potential shortfall in the next biennium is a clear indicator our state needs more balance in its budget.”
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.