Minnesota's Office of Management and Budget released its February budget forecast on Friday, showing a $3.7 billion surplus in the current two-year budget cycle. The forecast continued to predict structural imbalances ahead that could easily become significant budget deficits.

"The Trump economy has given our state forecast a nice boost,” Senator John Jasinski said. “The end of the Democrats’ full control of government last year finally restored balance at the Capitol, which has helped start the process of reversing the damage Democrats caused in 2023 and 2024. But a significant structural deficit is still staring us in the face because of Minnesota’s unsustainable spending, and fraud is still running rampant. We need to stop the overspending, crack down on fraud for real, and start putting Minnesota families first."

A report from the Tax Foundation on State Competitiveness rankings found Minnesota ranks 44th out of 50 for tax competitiveness. The state's top income tax rate of 9.85% is among the highest in the country. Sales taxes average over 8%, property taxes are high, and the corporate tax rate of 9.8% is also near the top nationally. Minnesota stacks tax on top of tax, and it's costing the state its competitive edge.

A Minnesota Chamber of Commerce Business Benchmarks Report ranked Minnesota 38th with 1% GDP per capita annual growth, 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)