Minnesota's Office of Management and Budget (MMB) released its February budget forecast on Friday, showing a $3.7 billion surplus in the current two-year budget cycle. MMB noted a slightly improved economic outlook was responsible for the higher revenue forecast. However, spending continues to outpace revenue projections for the next budget cycle, so a significant structural imbalance remains in place that could easily lead to a budget deficit.

"There are some genuinely encouraging signs here, but also some concerns,” Senator Carla Nelson said. “A stronger national economic picture deserves credit. After restoring balance and ending the trifecta, we made some legislative progress last session that also helped slow the trajectory of spending. But the underlying structural imbalance remains, as do the risks that myself and others have been warning about, like unsustainable spending growth and rampant fraud. The right response to this forecast is stronger fiscal discipline, better oversight of state programs, and making sure state resources reach those who actually need them." 

A Minnesota Chamber of Commerce Business Benchmarks Report ranked Minnesota 38th with 1% Gross Domestic Product per capita annual growth, which is the best way to measure a state’s economic growth. Minnesota also ranked 40th for labor force growth and 41st in net domestic migration. Between 2019 and 2024, key economic statistics slowed to nearly stagnant or negative levels, reversing previous trends, and impacting the state’s overall economic climate.

FORECAST DOCUMENTS

** February 2026 Budget and Economic Forecast (PDF)

** February 2026 Budget and Economic Forecast Presentation (PDF)