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 for the next several years. According to MMB, the budget for fiscal year 2026-2027 includes a $2.465 billion surplus while a budget deficit balloons to $5.4 billion for fiscal year 2028-2029.

“The state’s budget office now says Minnesota has a long-term structural deficit exceeding $5 billion. The deficit is a direct result of unprecedented government spending and massive fraud during Gov. Walz’s time in office,” Sen. Eric Lucero (R-St. Michael) said. “Democrats and Gov. Tim Walz blew through the historic $18 billion surplus, raised taxes another $10 billion, allowed spending to explode, and are continuing their refusal to take meaningful steps to prevent pervasive fraud pirated by criminals and sham nonprofits.” 

Businesses relocating out of Minnesota, choosing not to expand, or outright cutting jobs is greatly influenced by crippling government regulations and is contributing to slowing economic growth and reduced tax collection. The Minnesota Chamber of Commerce released its Business Benchmarks Report two weeks ago underscoring these concerns. Minnesota was ranked 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. 

“The short-term surplus is not a sign of healthy budgeting but the result of Minnesotans paying billions in higher taxes. The sustainable path forward is to stop fraud and massive government over-spending,” Sen. Lucero added. “When we come back into session in February, I will continue my efforts to stop fraud, verify eligibility, and ensure funds are available only for those who qualify and actually need assistance.”

FORECAST DOCUMENTS

** November 2025 Budget and Economic Forecast (PDF)

** November 2025 Budget and Economic Forecast Presentation (PDF)