Friends and neighbors,

Minnesota’s Department of Management and Budget recently released its February revenue forecast, providing an outlook for our state’s financial picture. The report shows the surplus increased by $1.324 billion from the November forecast, bringing the current biennium’s surplus to $3.715 billion. 

A surplus is always good news for our state. However, the budget outlook for the Fiscal Year 2026 – 2027 biennium shows a structural deficit of $1.478 billion. The deficit is forecasted as if the surplus will not be spent, meaning ongoing spending bills passed in 2024 could further increase the structural deficit.

Last session, we saw members in the majority go on a runaway spending spree. They increased state spending by nearly 40% and implemented $10 billion in new taxes. This was on top of spending the entire $19 billion surplus. My Republican colleagues and I knew this level of spending would be unstainable, and we urged Democrats to rein in spending. 

Unfortunately, the latest budget forecast emphasizes their lack of fiscal responsibility and why we must be extremely cautious about any new spending this year. That is why Senate Republicans will focus this session on repairing the damage done to our state.

Senate Republicans roll out ‘Repair Minnesota’ agenda

Recently, we rolled out our Repair Agenda to fix damage from last session–a direct result of one-party control and the speed at which the majority rammed through their agenda. 

Legislators already had to repair the first piece of legislation, with last week’s tax correction fix passing the House and Senate. However, it lacked one critical fix: a change to net operating loss deductions that will increase small business taxes. An error in last year’s tax bill caused the change to take effect this tax year instead of in 2025. This means small businesses and entrepreneurs will pay about $15 million more in taxes this year. 

The chairs of the House and Senate Tax Committees made a promise to fix this mistake at the earliest opportunity, but they broke that promise by leaving it out of the corrections bill. Senate Republicans will continue to fight to repair this mistake for our main street employers.

Despite the historic increase in education funding last year, more than 60 new mandates have chewed through half the increase, leaving many schools looking at red in their bottom line. Therefore, our Repair Minnesota agenda also focuses on providing school districts with more flexibility when they use these dollars. We are proposing for the 2023 funding to be used for local needs. This would give schools the freedom they need to educate students, hire staff, and keep schools safe.

These issues are among the top priorities for Republicans to address in the coming months. In addition, our focus this session will be on passing a bonding bill to fund public infrastructure projects. The February forecast, however, demonstrates that we need to be very careful with our spending. That is why I believe we should support a more modest bonding bill, dedicated to core needs such as clean water and improvements to our roads and bridges.

But before we add more debt to the taxpayer’s credit card, Republicans need to see progress in repairing the damage done to Minnesota’s budget, schools, and families.

Contact My Office

Please feel free to reach out to my office with any concerns or ideas you may have. I will keep your thoughts and concerns in mind as legislation comes before me. You can contact my office at sen.bruce.anderson@mnsenate.gov or 651-296-5981.

Sincerely,

Bruce Anderson