The November budget forecast presented today revealed a sustained deficit due to runaway spending, unchecked fraud, and slow economic growth hampered by billions in new taxes on Minnesotans.
“Minnesota’s financial health has been jeopardized by years of mismanaged and uncontrolled spending under Democrat leadership,” Sen. Torrey Westrom (R-Alexandria) said. “With their ‘trifecta’ control, they depleted the $18 billion surplus in 2023 and, to boot, raised $10 billion in new taxes, driving government spending up by an unprecedented 40%. Our state now faces massive looming deficits that taxpayers simply cannot afford, thanks to Governor Walz and his Democrat party.”
The state’s spending is projected to outpace revenue, even with $10 billion in new taxes. For fiscal year 2026–2027, MMB projects a short-term $2.465 billion surplus. But looking ahead to 2028–2029, the deficit could balloon to $5.4 billion if the Democrats continue their “spendthrift” trend of spending the short-term surplus.
“Though we may have a short-term surplus, it is driven by $10 billion in tax hikes on every Minnesotan,” Westrom said. “The out-of-control spending is heightened by the billions of dollars of fraud due to the Walz administration’s absolute failure to protect tax dollars from theft. It is time to put Minnesotans first by eliminating waste, fraud and abuse and curbing government excess.”
MMB notes “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.
Click here to read the full MMB November Budget and Economic Forecast.