Latest State Budget Forecast Shows Estimated $5.995 Billion Shortfall Come 2028

(KNSI) — The Minnesota Office of Management and Budget released its February Budget and Economic Forecast, showing a $5.995 billion shortfall come 2028.

The MMB says the outlook has been adjusted downward amid significant near term economic and fiscal uncertainty.

The projected balance is now $456 million, $160 million lower than earlier estimates. The early report cites citing “higher forecast inflation results in increases in projected revenues and expenditures.” It also says spending growth outpaces revenue growth through projections for the fiscal year 2029, and the projected general fund shortfall for the fiscal year 2028-29 biennium is now $5.995 billion, $852 million more than estimates in November.

The summary, released a few hours ahead of the full forecast, says, “Shifting policies at the federal level introduce significant uncertainty to the projections.”

The state had a projected $17 billion surplus, but at the end of the 2023 session, it was all spent, and $10 billion in tax hikes were passed, but programs, including universal school meals, are costing the state more than expected and some have questioned whether the state can afford to continue funding.

House Speaker Lisa Demuth of Cold Spring issued the following statement regarding the February forecast. She said, “House Republicans warned that the out-of-control spending increases and tax hikes passed by the Democrat trifecta would wreak havoc on our state budget. While revenue continues to grow, spending is growing even faster. We cannot and will not raise taxes to fill this gap, especially after Democrats raised taxes on Minnesota families by more than $10 billion over the last two years.

“My expectation is that Democrats will come to the table with savings and cuts – not tax increases – to fix the mess they created. House Republicans are ready to work toward a responsible, balanced budget that funds our priorities and protects vulnerable Minnesotans while addressing the fiscal disaster Democrats have created.”

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