MN budget forecast shows 'improved' budget outlook

MINNEAPOLIS (FOX 9) - Minnesota's February 2026 budget and economic forecast shows an improved projected balance than previous estimates.

More information will be shared during a news conference hosted by the Minnesota Department of Budget and Management at 12:30 p.m. That news conference will be streamed in the player above. 

Minnesota budget and economic forecast

By the numbers:

The 2026-2027 fiscal year balance is now projected at $3.7 billion, $1.3 billion higher than what was estimated in November.

The summary also states "A slightly improved economic outlook drives a higher revenue forecast largely driven by more volatile sources of revenue. Spending growth outpaces revenue growth through projections for FY 2029."

The report says the projected general fund balance for the 2028-2029 biennium is now $377 million, but adds that "a significant structural imbalance remains."

State officials say the overall outlook is an improvement "amid significant near-term economic and fiscal uncertainty."

The report also cites "Shifting policies at the federal level and missing or incomplete data due to recent federal government shutdowns" as factors of uncertainty in the projections. 

House GOP response 

The other side:

House Speaker Lisa Demuth (R-Cold Spring) shared the following statement on the latest budget forecast:

"Today’s forecast gives us the chance to pass a bipartisan tax conformity bill that helps workers through common-sense policies, like no tax on tips and no tax on overtime, and helps our Main Street businesses continue to be the job creators that keep our state strong. Tax increases on Minnesota families and more government spending should be off the table, and our focus should remain on lowering costs on family budgets."

Rep. Harry Niska (R-Ramsey) added the following statement:

"This forecast demonstrates that pro-business economic policies and economic growth are the real solution to the fiscal disaster created by Minnesota Democrats. We need to reverse the policies that are holding our state economy back if we’re going to participate in the national economic rebound."