Minnesota Has A Projected Surplus of $2.4 Billion, But That’s Expected To Disappear

(KNSI) – A new projection suggests state government cuts or higher taxes are coming soon.

First, though, the good news. An updated budget forecast was released on Wednesday, showing the state has a projected surplus of $2.4 billion. That’s up $808 million from May’s estimate. According to the Minnesota Department of Management and Budget, the increase is due to higher-than-expected consumer spending, business investment, and employment.

MMB says, however, higher spending estimates in health, human services, and education between January 2025 and 2027 will lead to a negative balance in the next biennium.

Minnesota is operating on a $72 billion budget put together by the Democratic-controlled House, Senate, and governor.

The extra funds are a far cry from lawmakers’ $17.6 billion surplus at the start of the 2023 Legislative session. Republican House Minority Leader Lisa Demuth of Cold Spring released a statement about the looming deficit. “Democrats put their insatiable appetite for spending ahead of the needs of Minnesotans and we will all be paying for their fiscal insanity for years to come.”

She says the ruling party took the entire surplus and raised an additional $10 billion in taxes to go on a spending spree, increasing the state budget by an unsustainable 40%. Conservatives wanted to use the surplus for tax relief.

Demuth said, “Instead, Democrats squandered the unique opportunity they had to address the economic pressures Minnesotans are facing and, in turn, are now leading the state off a fiscal cliff.”

Check out the Minnesota budget for yourself by clicking here.

___