Minnesota’s looming budget deficit now at $6 billion
In the November 2024 forecast, Minnesota Management and Budget (MMB) estimated a $5.1 billion budget deficit for the 2028-29 biennium. A newly released February 2025 budget forecast shows that the deficit has grown to $6 billion.
Figure 1: November 2024 Budget forecast
February 2025 update
According to MMB:
Minnesota’s budget outlook has been adjusted downward amid significant near-term economic and fiscal uncertainty.
Specifically,
The FY 2026-27 projected balance is now $456 million, $160 million lower than prior estimates. Higher forecast inflation results in increases in projected revenues and expenditures.
Overall:
Spending growth outpaces revenue growth through projections for fiscal year 2029.
As a result:
The projected general fund shortfall for the FY 2028-29 biennium is now $5.995 billion, $852 million worse than November estimates.
Minnesotans can only hope that this worsening fiscal outlook will spur serious legislative action to get Minnesota’s growing budget under control.