ST. PAUL, Minn. (FOX 9) – Minnesota has a couple of years to go before a big budget mess that’s inevitable without some big changes.

Black and blue budget

Into the red:

Unless the state taxes more or spends less, it’ll be in the black in 2027, but staring at a growing $6 billion deficit by 2029.

That projected deficit is up almost $900 million since the last forecast in December, mostly from inflation, so Democrats blame President Donald Trump.

But Republicans say the DFL trifecta had already run the state down the road from a huge surplus to a sizable projected deficit.

“Well, the devil will be in the details,” said Erin Campbell, Minnesota Management and Budget commissioner.

The details in Minnesota’s budget projections keep getting worse.

Focus on the numbers the state reported for 2027 starting February 2024.

“The Minnesota Management and Budget office is forecasting a $3.7 billion budget surplus by the end of fiscal year 2025 and $2.2 billion after 2027,” the state reported.

Ten months later, there was a reported surplus that was expected to shrink significantly because of the rising cost of commitments to spending, mostly on education and health. 

“Gov. Tim Walz says the budget is still balanced with more than $600 million in surplus by the end of 2027,” FOX 9 reported in December.

Now the leftover pot of cash at the end of 2027 is down to $456 million and state economists are projecting a $6 billion deficit by 2029.

Blame game

What they’re saying:

“Basically, the only thing that’s changed since November is, is Donald Trump’s chaos to the economy,” said Walz. “It changes day to day. It provides the uncertainty that we don’t need.”

But that projected 2029 deficit was already more than $5.1 billion before Trump took office.

“Democrats in the state, as you have heard, want to go ahead and blame anyone else for the damage that has happened to our state budget,” said Speaker of the House Lisa Demuth, (R-Cold Spring). “But this was an irresponsible spending spree.”

Could get worse

Elements of uncertainty:

And the problem could get way worse or maybe better soon.

The state’s financial experts say their forecast could dramatically change based on shifting federal policies, disruptions from federal agency closures, and inflation.

“We’ve chosen to highlight the uncertainty, the uncertainty, because it does feel really significant in this moment,” Commissioner Campbell said.

And now the rhetoric takes a backseat and the real work starts.

Legislators should get budget targets based on this forecast, and they have about two months to put together the budget.