Minnesota’s budget outlook has flipped from a record surplus to a projected $6 billion deficit down the line. The shortfall projected for the state’s 2028-2029 budget cycle will almost certainly influence spending decisions at the Capitol this year.

Minnesota could face a budget shortfall of nearly $6 billion in the coming years, state economists project. Why it matters: The warning, issued as part of Thursday's state budget forecast, will shape bipartisan budget negotiations at the divided Capitol this spring.

Minnesota is headed on a negative fiscal trajectory in the near future, according to the state’s latest budget forecast.The state will have a $456 million surplus heading into the 2026-27 fiscal year,