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 looming.
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.
House Republican leader Rep. Lisa Demuth of Cold Spring 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.
“Earlier this year, Minnesota had a record $17.5 billion surplus, presenting the Legislature with an incredible chance to pass meaningful tax relief and help make Minnesotans’ lives more affordable,” Demuth said. “Instead, one-party rule squandered a unique opportunity to address the economic pressures Minnesotans are facing and, in turn, put our state on the brink. Reckless spending has now set us on the path to have a budget deficit in the coming years. We need more balance in St. Paul if we’re going to get our state pointed back in the right direction.”
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.