The Minnesota Department of Management and Budget expects a $616 million balance for the state in 2027 — about $1.1 billion less than prior estimates, according to their November forecast. Though the state will be spending more money than it is taking in, something known in state budget talk as a “structural imbalance.”
The imbalance is due to projected reductions in income and sales tax revenues combined with higher spending for long-term care and special education.
State budget officials have warned of looming shortfalls since last December. While February projections showed the state still had a $3.7 billion surplus for the current two-year budget cycle of 2023-2025, state lawmakers will have to limit future spending to keep the budget balanced, they said.
More complete details, such as the state budget balance for the upcoming budget cycle, are to come later Wednesday. Budget department officials are presenting the complete report to the public starting at 11:45 a.m., with Gov. Tim Walz and legislative leaders set to speak afterward.
MMB releases budget projections for the coming year each December as the Legislature prepares to convene in January or February. The projections give the governor and Legislature an early idea of the resources they’ll have to work with in the coming session. This coming year they have to craft a new two-year budget.
Democratic-Farmer-Labor-controlled state government last passed a more than $70 million budget in 2023, which grew spending by nearly 40% from the last budget cycle and used much of the record $18 billion surplus.
Check back for updates to this developing story.
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