Minnesota Management and Budget Office says state will see $2.4 billion surplus, but may need additional revenue in coming years to offset budget increase

Detroit Lakes, Minn. (KDLM) – An updated budget forecast was released on Monday from the Minnesota Office of Management and Budget, showing the state has a projected surplus of $2.4 billion, up $808 million from May’s estimate. 

According to the MMB, the increase is due to higher-than-expected consumer spending, business investment, and employment.

MMB also says, however, higher spending estimates in health, human services, and education between January 2025 and 2027 will lead to a negative balance in the next biennium.

Minnesota is operating on a $72 billion budget passed this spring, which included new statewide benefits like a paid-family medical leave program launching in January 2026 and Minnesota’s North Star Promise, which provides free tuition to Minnesota’s public colleges and universities beginning next fall for students with a household income of less than $80,000.

In an news conference, Minnesota’s Speaker of the House Melissa Hortman, DFL-Brooklyn Park, those programs and initiatives passed by the legislature this year are providing a strong foundation for Minnesota’s continued economic success.

“The policies we enacted with Democratic leadership in the House, Senate and Governor’s Office have resulted in economic success and stability,” said Hortman. “Policies like paid-family medical leave, earned sick time, and increased worker protections, whether you work in a warehouse or a refinery, gave workers the peace of mind they need to choose to participate in the workforce. These recently enacted policies are providing a strong foundation for our state’s economic success.”

She added the state’s budget, and the new programs, will provide opportunities and tools for Minnesotans to better their lives for their families.

“Last session, we enacted a budget that will benefit Minnesotans for generations to come,” said Hortman. “Our budget is already growing the economy by growing the middle class and it has strengthened our state’s economic security. As the budget we passed continues to be more fully enacted, it will ensure that more Minnesotans have opportunities and tools to build better lives for themselves and their families.”

She also said the DFL-controlled legislature will be focusing on continued middle-class growth and lowering costs.

“You’ll see in the 2024 session that Democrats will continue to focus on growing the middle class, lowering costs and reducing stress in people’s lives,” she said. 

Republican House Minority Leader Lisa Demuth of Cold Spring released a statement about the looming deficit. 

Demuth wrote, quote: “Democrats put their insatiable appetite for spending ahead of the needs of Minnesotans and we will all be paying for their fiscal insanity for years to come.”

Adding, the DFL-majority took the entire surplus and raised an additional $10 billion in taxes to go on a spending spree, increasing the state budget by an unsustainable 40%. Conservatives wanted to use the surplus for tax relief.

To check out the Minnesota budget forecast for yourself by clicking here.