Submitted by Minnesota District 12A State Representative Paul Anderson of Starbuck
The state issued a new economic forecast on Wednesday, December 4, and it projects a $616 million surplus through the 2026-27 biennium – a decrease of $1.1 billion from previous estimates – and a significant future shortfall.
The new economic report from Minnesota Management and Budget indicates reductions in income and sales tax revenues combined with higher spending for long-term care and special education result in a growing potential shortfall in the future. It also reveals a deficit of more than $5 billion through the 2028-29 biennium.
State Rep. Paul Anderson, R-Starbuck, said this underscores the need for balance after Democrats used full control of the Capitol to spend the state's $18 billion surplus, raise taxes by $10 billion and increase the state budget by 40 percent with the budget they set in 2023.
"This report is a good-news, bad-news scenario," Anderson said. "It's good that we aren't having to deal with an immediate shortfall when we work to set a new budget in the upcoming session. The huge shortfall in 2028-29 certainly is cause for concern. It does, however, give us time to make the structural changes necessary to eliminate that projected deficit down the road.
"We need to take a balanced approach and make some common-sense decisions that serve the best interests of all Minnesotans. Getting a handle on the fraud that has run rampant in our state, costing hundreds of millions of taxpayer dollars, would be a good start. It will be interesting to see how this unfolds with Republicans and Democrats sharing equal power in the House."
An updated February forecast will serve as the official framework for the 2025 session as legislators work to craft a new two-year state budget before adjourning in late May.
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