The Minnesota Legislature will convene in January with the closest possible split between Democrats and Republicans. They’ll also have to figure out how to deal with a dwindling projected budget surplus for 2026-27 and a looming deficit in 2028-29.

On Wednesday, the Office of Minnesota Management and Budget projected a $616 million surplus over the next two years, a reduction of more than $1.1 billion projected at the end of the legislative session in May. Looking out further, there’s a projected $5.1 billion deficit in 2028-29 unless steps are taken to reduce that imbalance.

“We have been in harder spots than this,” DFL Senate Majority Leader Erin Murphy said in an interview on “At Issue with Tom Hauser.” 

“I think it’s important for Minnesotans to know we have a strong carry-forward (money left unspent on the bottom line), we had balanced the budget, we have a strong budget reserve. First in the nation-leading budget reserve. We’re in strong, fiscal position.”

Republican Senate Leader Mark Johnson says Democrats need to use more caution on spending and taxes now that they no longer have a “trifecta” of power.

“Right now, we’re split by one vote between Democrats and Republicans when you look at the 201 legislators across the Legislature,” Johnson says. “It’s only one Democrat more than Republican. And so what we want to see is some very balanced policy going forward. Very balanced budget going forward that really represents the needs of Minnesotans. I think really Democrats over the last two years have lost sight of that.”

The balance of power in the Senate could also be in doubt because one DFL Senator — Nicole Mitchell of Woodbury — faces a hearing later this month on a burglary charge from last April.

Murphy says Mitchell is still a senator but does not serve on any committees or participate in the DFL caucus. As for her future if she’s convicted, Murphy says: “It depends on what she’s convicted of. but I think what’s important right now is she’s accused and not convicted. She is entitled to her day in court and due process and she’s going to have that.”

Johnson says while Mitchell is still allowed to vote on the Senate floor, “there’s an opportunity to make sure we hold our members to the standard of the Minnesota Senate.”

You can see this interview with the Senate leaders Sunday at 10 a.m. on “At Issue with Tom Hauser.”