MMB forecast: $2.4B surplus now, nearly $3B 2028–29 shortfall
Minnesota Management and Budget’s new forecast shows a near‑term surplus of about $2.4 billion — roughly $549 million higher than previously estimated — but predicts a nearly $3 billion shortfall in the 2028–29 biennium, driven largely by rising health‑care costs. Gov. Tim Walz cautioned that federal tariffs and health‑care changes add uncertainty while saying the budget remains on solid footing; the outlook has swung since March’s roughly $6 billion projected shortfall and the June special session that trimmed the biennial budget from $72 billion to $66 billion (post‑session estimates briefly cut the out‑year gap to about $1.1 billion before federal changes were factored in).
📌 Key Facts
- MMB’s new forecast shows a near‑term surplus of about $2.4 billion, roughly $549 million higher than the prior estimate.
- The forecast projects a nearly $3 billion shortfall for the 2028–29 biennium, with rising health‑care costs cited as a key driver of the gap.
- Gov. Tim Walz said federal tariffs and changes to federal health‑care policy add uncertainty to the outlook but asserted Minnesota’s budget remains on solid footing.
- Context: a March forecast had projected roughly a $6 billion 2028–29 shortfall, and a June special session cut the biennial budget from $72 billion (the 2023 plan) to $66 billion.
- Post‑session estimates briefly reduced the out‑year shortfall to about $1.1 billion before subsequent federal changes were factored into the new forecast.
📊 Relevant Data
International migration accounted for 94% of Minnesota's net population growth from 2020 to 2024.
As Boomers die, immigrants propel Minnesota's population growth — MinnPost
Foreign-born Minnesotans have a labor force participation rate of 74.3% compared to 67.6% for native-born residents in 2023.
The economic contributions of New Americans in Minnesota: February 2025 — Minnesota Chamber of Commerce
The cost of providing MinnesotaCare to undocumented immigrants is projected at around $200 million over the next four years.
How much is Minnesota paying for undocumented people accessing MinnesotaCare? — Minnesota Reformer
The poverty rate for Black or African American Minnesotans is 28.6%.
People in Poverty in Minnesota: MNData Access — Minnesota Department of Health
The poverty rate for American Indian or Alaskan Native Minnesotans is 31.3%.
People in Poverty in Minnesota: MNData Access — Minnesota Department of Health
📰 Sources (2)
- MMB’s new forecast pegs the 2028–29 biennium shortfall at nearly $3B, with rising health care costs cited as a key driver.
- Near‑term surplus is updated to about $2.4B, roughly $549M higher than the prior estimate.
- Gov. Tim Walz’s on‑the‑record statement links uncertainty to federal tariffs and health‑care changes while asserting Minnesota’s budget remains on solid footing.
- Context added: a March forecast showed a ~$6B shortfall for 2028–29, and the June special session cut the biennial budget from $72B (2023 plan) to $66B.
- Article notes post‑session estimates briefly lowered the out‑year shortfall to about $1.1B before federal changes were factored in.