Minnesota Budget Bites

The state budget forecast predicts an $82 million positive balance at the end of the four years covered by the forecast. One-time surplus dollars generated in the past continue to be an important funding source throughout the four-year budget window. In this blog, we share our high-level takes on the forecast, which gives policymakers, advocates, and the public an initial look at the state’s budget landscape as we get closer to the upcoming legislative session.

Recent budget reports suggest that Minnesota will likely project a larger budget surplus when the next legislative session kicks off. This in part reflects the fact that the national economy has performed more strongly this year than was previously anticipated. In October, Minnesota Management and Budget determined that the prior FY 2022-23 final general fund balance was $820 million higher than end-of-session estimates.

The State of Minnesota ended the most recent fiscal year on a positive revenue note, but the latest update shows the relatively strong national economic outlook is expected to weaken in coming years.

With a historic surplus of $17.5 billion for FY 2024-25 and $5.4 billion structural balance for FY 2026-27 , Minnesota...