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Minnesota’s budget pinch is even tighter now and the resulting finger pointing is as sharp as can be. 

An economic forecast released Thursday shows state officials have less money to work with in setting the next two-year budget, the primary task of a legislative session nearing the half-way point. Lawmakers also have a larger deficit to worry about down the road if they don’t make big cuts or find new sources of revenue. 

This is before finance officials consider potential federal budget funding rollbacks.

Minnesota finance officials say lawmakers have $456 million in extra money at their disposal, which is down substantially from a prior estimate just a few months ago and isn’t a lot of slack in the context of a budget that will top $66 billion.

Worse yet: A future potential deficit has grown even bigger to nearly $6 billion. 

Minnesota Management and Budget Commissioner Erin Campbell said added to that is uncertainty over the impact of possible federal changes that could slim state allowances. That, she suggested, should lead to caution.

About one-third of the state’s overall budget is propped up by federal money. 

“That’s an enormous amount of money,” Campbell said. “If federal action meant that we would lose those resources, the impact of the state budget could really be devastating.”

It was clear who Democrats were ready to blame for the dip in the forecast compared to one released last fall.

“The only thing that’s changed since November is Donald Trump’s chaos to the economy,” Gov. Tim Walz said. 

“Donald Trump is wrecking our economy,” said House DFL Leader Melissa Hortman.

“Trump, [Elon] Musk and Republicans in Congress have got to pull their heads out of their asses,” said DFL Senate Majority Leader Erin Murphy. 

Budget officials also noted that on-and-off tariffs out of the White House could potentially hit the state’s economy. 

“We’ve had three changes in 24 hours to tariffs,” Walz said. “I don’t know if we’re all getting used to insanity being the norm now, but that is not normal behavior.”

Republicans said it was Democrats who got the budget into this situation. 

“They throw out the boogeyman of Trump and all that stuff,” said Senate Minority Leader Mark Johnson. “It’s almost like Chicken Little right now, running around saying the sky is falling. But when it comes to state issues, they become ostriches and put their head in the sand.”

House Republican Speaker Lisa Demuth said it’s a deflection to blame Trump, who has been in office for less than two months. She said Democrats put Minnesota on a reckless course.

“The position that the Democrats in the state of Minnesota have pushed us in is unsustainable. That’s what we’re going to focus on first,” she said. “We are now looking at a $6 billion deficit. This was an irresponsible spending spree, and now we have to figure that out.”

Clay Masters

Author

Minnesota lawmakers received an economic budget forecast that shows less wiggle room as they write a new budget and an even larger looming deficit in the future. Gov. Tim Walz and DFL leaders blamed President Donald Trump while Republican leaders said Democrats need to look in the mirror.

A downbeat Minnesota budget forecast initiates lawmaker blame game

Stephen Maturen for MPR News

A person speaks with a microphone in front of her.

A politician listens during the presentation.

A downbeat Minnesota budget forecast initiates lawmaker blame game

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