ST. PAUL – This week the office of Minnesota Management and Budget (MMB) released its annual November economic forecast. The forecast details the state’s budget picture including revenue, spending, and economic factors. It also determines the amount the state can responsibly borrow for bonding projects. 

The forecast projects a surplus of $2.4 billion for the 2024-2025 budget cycle. However, it included warning signs that state spending is projected to outpace tax revenue, leading to a projected budget deficit of $2.3 billion in the 2026-2027 fiscal year. The forecast includes a smaller bonding recommendation of $830 million, about $50 million less than expected due to the state’s ability to pay off its current debt.  

“This forecast is a stark reminder of how reckless the last session was. Democrats spent the entire $18.5 billion surplus, they raised your taxes by $10 billion, and the result is a looming deficit,” Senator Robert Farnsworth (R-Hibbing) said. “Democrats’ one-party control built a budget like a delicate house of cards. One bad economic shift or too much new spending this session and the whole house falls down. The $2.4 billion surplus for this year – which should be going back to the taxpayers – is needed to ensure we don’t have a deficit as early as 2025. When families are struggling with the high cost of inflation, we should be cutting spending and taxes to give them more money in their paychecks.” 

“I’m also worried the lower bonding number will impact needed infrastructure investments for our district,” Farnsworth continued. “I’ll continue to fight for the priorities we have, but the Democrats runaway spending has put the state in a position where it can’t borrow what it needs to meet the demand right now.”