Minnesota will have a $188 million budget deficit on the table as lawmakers head back to St. Paul for the 2018 session.
State budget officials and economists released the November economic forecast Tuesday morning, showing “significant risk” in the budget for the final year of the 2018 and 2019 biennium. Budget officials are predicting an even larger shortfall in 2020 and 2021, with a $586 million deficit projected for that budget cycle.
“Deficits are due to a reduced U.S. economic growth forecast and impacts of enacted legislation during the 2017 session,” read a brief statement from Minnesota Management and Budget, the agency that releases economic forecasts. “Unknowns in federal policy and the current economic expansion, one of the longest in U.S. history, create significant risk for this forecast.”
Legislators don’t convene until Feb. 20, and an updated forecast will be released shortly thereafter. But the early number offers a preview of what lawmakers can expect when they come back. It’s the first projected deficit in the state since 2013.
The deficit will have to be addressed on top of other unfinished business from the 2017 session. One of the first things legislators are likely to tackle when they return is passing a roughly $130 million budget for the House and the Senate, which Gov. Mark Dayton vetoed in May during an ongoing budget dispute. Tensions between the Republican-controlled Legislature and DFL governor could spill into to the 2018 session. It’s Dayton’s final year in office.
Top budget officials, legislative leaders and the governor will respond to the new forecast Tuesday afternoon.