Wednesday’s economic forecast from the Minnesota Management and Budget (MMB) office shows the state expects a 2.4-billion-dollar surplus for the 2024-25 budget cycle. However, Senator Gary Dahms of Redwood Falls pointed out something the report barely acknowledges: MMB also indicates a budget deficit of $2.3 billion beginning in 2025.
Dahms said last session, the legislat ure and Governor Walz increased government spending by nearly 40 percent. He that even with the party currently in control of the government raising taxes and fees by nearly $10 billion, there is still not enough to cover projected spending.
Officials say the current 2.4 billion-dollar surplus is driven by higher expected consumer spending and growth in corporate profits. They note the near-term economic outlook for the U-S has improved, but caution that higher estimated spending increases for education and health and human services could put the *state* budget in the red in 2026 and ’27.
When the 2024 legislative session begins on Monday, February 12, legislators will use the November forecast as a general guide to craft the state’s next two-year budget. The final budget forecast is released in February.
(This article uses information from Learfield News Service and Sen. Dahms’ office.)