The office of Minnesota Management and Budget (MMB) on Thursday released its annual November economic forecast, which provides a picture of the state’s budget picture. According to MMB, the budget for fiscal year 2026-2027 includes a $2.465 billion surplus, even while spending outpaces revenues. However, looking to 2028-2029, the deficit balloons to $5.4 billion as spending is projected to outpace revenues. Only by not spending the surplus would the 2029 deficit projection reduce to $2.960 billion.
“We are facing another multi-billion-dollar deficit around the corner because Democrats were completely reckless when they had full control of state government and they refuse to stop fraud or hold those inside or outside government accountable,” Senator Steve Drazkowski (R-Mazeppa) said. “It’s time for Minnesota to end many of these unnecessary welfare programs, which have been designed by Democrats to redistribute wealth by taking money from earnest people who work hard every day and giving it to greedy people who do not. This state will only be saved when its people recognize those corrupt elected officials and summarily throw them out of office.”
Slow economic growth is a major factor in revenue losses. This underscores concerns raised from a Minnesota Chamber of Commerce Business Benchmarks Report released two weeks ago, ranking 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.
Additionally, increased spending on health care puts pressure revenues. This is notable as Minnesota has seen significant fraud in health care services. Efforts to reduce fraud and verify eligibility will be necessary to ensure these funds are available for those who actually need it.
FORECAST DOCUMENTS
** November 2025 Budget and Economic Forecast (PDF)
** November 2025 Budget and Economic Forecast Presentation (PDF)
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