Walz proposes slimmed-down 2026-27 state budget, sales tax changes

This is an odd-numbered year, and so the Legislature is constitutionally required to craft a budget to fund the state government for the next two fiscal years.

Gov. Tim Walz took a major first step in that process Thursday by announcing his proposed 2026-27 biennium budget, which totals $65.9 billion in General Fund spending. This is a slimming down from the $70.7 billion General Fund appropriations for the current 2024-25 biennium.

If his budget is passed as proposed, Walz said it would leave a $2.1 billion surplus in fiscal years 2026-27, and a $355 million surplus in fiscal years 2028-29.

This is a year to be prudent, Walz said, because the Minnesota Management and Budget projects that costs for operating several new state programs created in 2023 will strain the state budget by 2030 and lead to budget deficits.