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. Jeff Dotseth, R-Silver 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.
"One-party rule raised taxes and spending by historic amounts this year and turned a $17.5 billion surplus into a potential shortfall in a matter of months,” Dotseth said. “Not only did Democrats fail to deliver meaningful tax relief for all Minnesotans last session, but they also went on such a spending spree they jeopardized our future with a potential shortfall.
“We need a more balanced approach in St. Paul as we revisit the state budget in the 2024 session so we can deliver real tax relief to ease the pain Minnesotans are feeling in today’s economy, while also getting a grip on state spending to prevent our state from going under water in the future. We can do both and that should be our focus as problem solvers in St. Paul.”
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.