A Squandered Surplus and an Ever-Increasing Deficit
by Senator Jason Rarick

The February Forecast was recently released and it reflected exactly what we’ve known to be true: overspending by the Democrats has put our state and its budget in a desperate situation. For those who may not remember, we had a November Forecast come out at the end of last year that showed Minnesota barreling towards a massive $5.1 billion deficit by 2029, with a short-term surplus of only $616 million. This was already terrible news, but the most recent forecast paints an even worse outlook.

The February Forecast is the result of continued out-of-control spending. Minnesota is now projected to face a $6 billion deficit with a reduced surplus of just $456 million. Even if we do not spend a single dollar this year, that deficit will remain. In fact, that $6 billion number is contingent on us not spending any of the minimal surplus. If we do spend any of it, it will create an even higher deficit. This is a terrible place for our state to be in.

As a reminder, just a few short years ago we had a historic surplus totaling nearly $19 billion. It may sound like a broken record to keep referencing that number, but it’s really important that Minnesotans get a sense of how rapidly our budget devolved due to over-spending under Democrat leadership. That entire surplus was spent in tandem with raising taxes by $10 billion. As a result, when 2024 started, we were looking at a short-term surplus of around $2.4 billion. Now we’re facing a $6 billion deficit. So much has changed in such a short period of time, and it shows just how dire our state’s financial trajectory is.

The Forecast also made it clear that Minnesota is spending more than it’s currently bringing in. Annual spending growth is outpacing revenue growth by about 80%. Considering most Minnesotans feel incredibly over-taxed and over-burdened, this is unacceptable.

As I’ve discussed before, Governor Walz put forward his budget proposal, which attempted to address the deficit by shifting costs to counties and making cuts to critical needs such as special education, non-public school transportation, and long-term care initiatives. This would mean taxpayers would still be on the hook for funding these programs, just through their counties and in the form of higher local taxes and property taxes. Our government grew by nearly 40% in the last biennium, but Minnesotans certainly did not see that same growth in their finances. Instead of expecting them to pick up the bill for Democrats’ overspending, we should be taking a hard look at our budget to parse out the “needs” versus the “nice-to-haves.”

Democrat leaders reacted to this massive deficit in two ways: doubling down by claiming their budget was “responsible” and a surplus is still “good,” and simultaneously blaming President Trump. The fact is that both of these things cannot be true at the same time. Their budgeting was not responsible – it took us from a $19 billion surplus to a $6 billion deficit in record time. Blaming President Trump is their attempt to evade responsibility. The fact of the matter is that the November Forecast showed us a $5 billion deficit on the horizon, and that was before President Trump took office. That deficit has nothing to do with the President.

Now more than ever, we have to be fiscally responsible. A $6 billion deficit is a staggering number. It might not feel good to make budgetary cuts, but it’s the responsible thing to do. We need to put forward a realistic proposal that makes sense so we can positively correct the course of our state’s budget. We have two months until our constitutionally-mandated end of Session. We need to take that time to get our budget under control before it’s too late. Not only do Minnesotans expect us to get this important work done, the state of our budget absolutely demands it.