MMB releases November forecast with ‘good news, bad news’ budget outlook

Minnesota Management and Budget (MMB) released its November state budget forecast on Wednesday. According to MMB, the state's budget and economic outlook remains stable in the current biennium. The forecast projected a surplus of $2.4 billion at the end of the 2024-25 biennium, an increase of $808 million from the estimate released at the end of the 2023 legislative session.

However, officials also warned of a possible budget deficit on the horizon. The revenue and spending estimates showed that legislative spending could outpace the state's projected revenue in FY 2026-27 - but higher revenues over the next fiscal year could offset this imbalance. MMB cited inflation, as well as higher projected spending in the health and human services and education sectors, as factors contributing to the potential upcoming budget imbalance.

In response to the report, Governor Walz maintained that passing a bonding bill, rather than additional spending from the general fund, remains a top priority as the 2024 legislative session approaches. He added that he anticipates a "very measured" approach to capital investment next year, after which he and lawmakers can reevaluated based on future MMB projections.