Minnesota’s budget surplus soars to $3.7 billion, providing legislative breathing room

• The budget outlook for Minnesota has improved, officials announced on Thursday, indicating a slightly larger surplus forecast for the current budget period.
• The current two-year budget period, until June 2025, is now projected to end with a surplus of just over $3.7 billion.
• The budget office attributed the improved outlook to higher tax collections, noting significant gains in corporate tax revenues.

Minnesota’s budget outlook has improved, officials said Thursday, with a slightly bigger surplus forecast for the current budget that will give the Legislature a little more breathing room this session.

Minnesota Management and Budget said the current two-year budget period, which runs through June 2025, is now expected to end with a surplus of just over $3.7 billion. 

That’s an increase of more than $1.3 billion from the last forecast, which was released in December. That compares with an overall state budget of $72 billion.

MINNESOTA PROJECTS SHORT-TERM BUDGET SURPLUS, LONG-TERM DEFICIT AS HEALTH, EDUCATION SPENDING HIKES KICK IN

“The near-term economic outlook has improved, with growth expected to persist through 2027,” the budget office said, citing higher tax collections. Corporate tax revenues are showing the largest gains due to higher-than-expected corporate profits.

The budget office is also forecasting a smaller potential deficit for the next two-year budget, which begins in July 2025.

MINNESOTA BUDGET TARGETS ADD UP TO NEARLY $17.9 BILLION IN NEW SPENDING, INCLUDES $3 BILLION FOR TAX CUTS

Spending is still projected to exceed revenue, but only by $1.5 billion instead of the $2.3 billion previously forecast.