Today, Minnesota Management & Budget (MMB) released its February 2026 Budget and Economic Forecast.
The state government is now forecast to close the current 2026-2027 budget biennium with a surplus of $3.7 billion, up from $2.5 billion in November. The 2028-2029 biennium is forecast to close with a surplus of $377 million.
This is down to an “improved economic outlook [which] drives [a] higher revenue forecast.” This highlights, as I noted in December, that the state’s current budget woes cannot be blamed on a weak economy resulting from federal government policy.
What budget woes?” I hear you ask, “didn’t you just say we had a surplus?” MMB notes that “structural imbalance remains in both biennia.” That “structural imbalance” refers to the fact that in both biennia, state government revenues are forecast to be less than state government spending: by $2.8 billion in 2026-2027 and 3.4 billion in 2028-2029 for a cumulative deficit of $6 billion over the entire period.
Minnesota’s government is spending more money each year than it takes in revenue. At some point, this will have to stop. Either spending will be reduced or revenues will be increased. Which path our state takes might hinge on events in November.
