Three weeks before Christmas, state budget officials provided some merriment to Minnesotans. However, Grinch-like transformations lurk.
Released Thursday, the November 2025 Budget and Economic Forecast shows the state's expected budget surplus is almost $2.47 billion for the current 2026-27 biennium. But a $2.96 billion deficit looms in the next.
Due largely to higher income tax collections, the current picture has some rosiness; however, higher health care costs and slower economic growth are keys to the projected 2028-29 biennium shortfall, Minnesota Management and Budget officials said.
The forecast provides the most recent snapshot of the state's financial health. It is the first look at projections since the February 2025 forecast predicted a $456 million surplus for the current biennium — down from $616 million three months earlier — and nearly $6 billion shortfall in the 2028-29 biennium. Read more
