Minnesota Budget Bites

Governor Tim Walz released his governor’s supplemental budget proposal. The administration described the priorities for his budget as safe communities, clean drinking water, and support for children and families. At the Minnesota Budget Project, we were thrilled that one of our top priorities was included in the governor’s supplemental budget: resources to implement advance periodic payments of the Child Tax Credit. In total, Walz proposed $200 million in net general fund spending increases and revenue reductions in FY 2024-25 and $27 million in FY 2026-27.

The latest Minnesota budget and economic forecast shows an overall improved state budget picture. The forecast predicts a $3.7 billion general fund surplus projected for the current two-year budget cycle, followed by a $2.2 billion projected positive balance at the end of FY 2026-27. The improved outlook is largely the result of higher projected tax revenues estimated to come into the state. In this blog, we share our takes on the recent forecast and what comes next, which will provide policymakers, advocates, and the public with information to guide upcoming budget decisions in the 2024 Legislative Session.

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.