Last week, I wrote about how the DFL trifecta, elected in November 2022, blew up the state budget, turning a forecast surplus for 2027 of $2.9 billion into a deficit of $1.1 billion by the end of the 2024 session:
…in February 2023, Minnesota Management & Budget (MMB) forecast a surplus of state government revenues (“Subtotal Current Resources”) over spending (“Total Expenditures & Transfers”) totaling $19.7 billion in the five years 2022 to 2027, as Figure 1 shows. The “historic” DFL trifecta, elected in November 2022, used this money to go on a spending spree, blowing not only that forecast surplus but more besides. By the end of the 2024 session, while revenues were largely unchanged, spending was forecast to be $22.5 billion higher in the four years 2024 to 2027 than it had been when the trifecta took office in St. Paul and was now forecast to outstrip revenues in that period by $11.5 billion.
Figure 1: Forecast Minnesota state government spending and revenues, billions
The trifecta sessions were a horrendously managed orgy of fiscal excess which have left Minnesota with a persistent budget deficit.
As I have written before, Minnesota’s state government has been running a deficit since 2024 and, at the end of the 2026 session, was forecast to spend more than it collects in revenue in every single year from 2026 to 2029 for a cumulative deficit of $5.5 billion, as Figure 2 shows.
Figure 2: Minnesota state government spending and revenues, billions
Yesterday, Minnesotans elected a new DFL trifecta which will be charged with cleaning up its predecessor’s mess.
Early next month, MMB will release its November “Budget and Economic Forecast” which will forecast state revenues and expenditures for three bienniums, extending through June 30, 2031. By February 16, 2027, Governor Klobuchar will have to submit an operating budget for the 2028–2029 biennium, which, at the end of the 2026 session, was forecast to have a deficit of $2.1 billion. By the end of the session on May 17, the legislature will have had to pass an operating budget for the 2028–2029 biennium.
Crucially, according to Minnesota’s constitution, this budget will have to balance. St. Paul is not Washington D.C., and, as governor, Klobuchar will not have the recourse to the bond markets and the Federal Reserve to finance any deficit she had as a federal legislator.
How will the new trifecta accomplish this? “Will we see higher taxes?” I asked in September:
Will we see spending cuts? Will we see some combination of the two? These are questions Minnesota’s dogged newshounds with their inexhaustible reservoirs of curiosity will, no doubt, be pestering the candidates with this vote harvesting season.
Sadly, those newshounds did not find time to ask these crucial questions. I guess we will find out the hard way.