The November budget forecast presented on Thursday, Dec. 4, revealed a sustained deficit due to runaway spending, unchecked fraud, and slow economic growth, made worse by billions in new taxes on Minnesotans.
“The state’s budget is out of control, and Minnesota families should not be forced to pay for Governor Walz and Democrats’ mismanagement,” Sen. Bill Weber (R-Luverne) said. “Though the numbers show a temporary surplus, it exists only because of the $10 billion in tax hikes placed on every Minnesotan. Fraud totaling over $1 billion continues to grow, making the budget picture even worse. We must take action to restore fiscal responsibility and protect Minnesotans’ hard-earned taxpayer dollars.”
The state’s spending is projected to outpace revenue, even with $10 billion in new taxes. For fiscal year 2026–2027, Minnesota Management and Budget projects a $2.465 billion surplus. Looking ahead to 2028–2029, the deficit could rise to $2.960 billion if the current surplus remains unspent. If it is fully utilized, the deficit could balloon to $5.4 billion.
MMB notes that “slow economic growth” is a major factor in revenue losses. According to the Minnesota Chamber of Commerce’s 2026 Business Benchmarks Report, “Minnesota’s economy is no longer keeping pace with the nation.” From 2019 to 2024, the state ranked 38th with 1% annual GDP per capita growth and 40th in labor force growth. Minnesota also ranks 41st in net domestic migration, meaning more people are leaving the state than moving in.
Additionally, increased spending on health care puts pressure on state 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 need them.
“With Minnesota falling behind in economic growth, we should be using tax policy to increase the money families have to meet their budgets and help businesses expand and hire additional employees. Instead, we are forced to pay for the mismanagement, waste, and fraud of the Walz Administration,” Weber concluded.
Click here to read the full MMB November Budget and Economic Forecast.