Latest forecast shows Minnesota budget surplus stable at $17.5 billion

Minnesota’s latest budget and economic forecast shows the state with a projected $17.5 billion surplus.

This comes after a record-breaking surplus was announced in December.

The latest forecast also factors in inflation for the first time in around two decades after state lawmakers just last week approved legislation requiring inflation to be factored into the forecasts again.

Had inflation been factored into December’s $17.6 billion budget estimate — that number would have decreased by about $1.5 billion less, according to the Minnesota Department of Management and Budget (MMB). That means, despite a slight decrease in the forecast, the state’s surplus actually grew since December.

DFL lawmakers pushed to include inflation in the estimate from the state budget office, while some Republicans argued that would lead to more government spending.

“If you’re someone who wants to have a more skeptical budget eye towards things and you want to approve things on a dollar-by-dollar basis, you should oppose Representative Stephenson’s bill,” said Rep. Pat Garofalo (R-Farmington.)

DFL members argue it’s how families and businesses set their budgets and accounting for it wouldn’t automatically mean more spending.

“The forecast doesn’t appropriate any dollars. It is not a budget,” Rep. Zack Stephenson (DFL-Coon Rapids) said. “That is what the legislature does. MMB gives us a projection that allows us, informs our decision making here, and I think it should be an honest projection that accounts for all of the economic variables.”

The full report is available online.

Click the video boxes below to watch the full presentation and reaction from Gov. Tim Walz and state lawmakers.