November 2024 budget forecast announced

The state's November forecast was released last week. The November and February forecasts are two major signposts in the state's budgeting process, and the November forecast is the earliest indication of the state's fiscal health. In the forecast, experts project the state's revenue and spending for the next four years.

Key takeaways:

• Small balance of $616 million projected for the 2026-2027 biennium, which is $1.1 billion less than prior estimates.
• Reduction comes from lower income and sales tax collections combined with higher spending in long-term care services and special education.
• November forecast shows slower employment and wage growth than the February 2024 forecast.
• Minnesota added 6,000 jobs per month from January through April 2024, but just 1,200 jobs between May and October this year.

The 2025 legislative session will be a very competitive environment for spending. With the projected structural imbalance (i.e. that projected spending is more than projected revenues) at -$3.1 billion in FY 2026-2027 and $-5.1 billion in FY 2028-2029, lawmakers will have to make tough decisions as they craft the next budget.