The office of Minnesota Management and Budget (MMB) today released its annual November economic forecast. The report, which details the state’s budget picture, projects a surplus of $2.4 billion for the 2024-2025 budget cycle. However, Minnesota state spending is projected to grow faster than tax revenue, leading to a projected budget deficit of $2.31 billion in the 2026-2027 fiscal year.

Senator Carla Nelson (R-Rochester) issued the following statement:

I am deeply troubled by the $2.31 billion deficit that is on the horizon. Last session, I was one of a number of legislators who cautioned about growing the size of government by 40%, spending the entire $19 billion surplus, and raising taxes by almost $10 billion. 

As the former chair of the Senate Taxes Committee, I can tell you that Minnesota is an outlier on nearly every level of tax policy nationwide, and it was made worse by the last legislative session. 

With inflation hitting many families hard — and continuing to hit them hard — we should have focused our effort on providing significant, permanent tax relief that eased the pressure on family budgets while leaving the state in a good financial position. 

For example, when I was the Tax Chair, my House Democrat counterpart and I reached an agreement on a landmark tax bill that would have benefitted every single Minnesotan. It would have fully eliminated the state’s tax on Social Security benefits and reduced the first-tier income tax rate to 5.10%. Our proposal provided about $3.9 billion in total tax relief, including $666 million in income tax relief.

Unfortunately, last session Democrats used their one-party control of government to take us on an unsustainable path.

We have a duty to be responsible stewards of Minnesota taxpayers’ dollars. That didn’t happen last session. Now that we are facing deficits in the near future it is more important than ever that we rein in some of our past decisions and take a measured, responsible approach that helps Minnesota families and puts us back on solid footing.