The Minnesota Management and Budget officials released the budget and economic forecast showing the 2024-25 biennium is expected to end with a surplus of $3.71 billion. That’s up $1.32 billion from November projections.

As for the 2026-27 biennium, concerns about a structural imbalance persist, but the numbers have also improved there since November, with a projected biennial surplus of $2.24 billion, compared to the far more modest $82 million projected in November.

What changed? Tax revenue is up, especially in corporate profits, while spending estimates are largely unchanged. While the structural budgetary balance has improved, spending is still projected to exceed revenue through fiscal year 2027.

State tax revenue for the 2024-25 biennium is projected to be $61 billion and $64.8 billion in the 2026-27 biennium. Meanwhile, spending is projected at $70.53 billion in the 2024-25 biennium and $66.29 billion in the 2026-27 biennium. A beginning balance of $16.52 billion in the current biennium and $7 billion in the next (and a $3.26 billion budget reserve in each biennium) push the projected budgets into surplus territory.

“We’ve got a lot of good news in this forecast,” said Commissioner Erin Campbell. “While a smaller structural imbalance is good news, that structural imbalance is something that we will have to deal with.”

Campbell added that her agency projects a bonding bill of $980 million and folded that into the forecast. Campbell and State Economist Laura Kalambokidis both warned of risk factors that could change the forecast, such as a possible federal government shutdown and international conflict.
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