SAINT PAUL, Minn. — The latest state budget forecast released on Wednesday shows Minnesota with a healthy surplus in the short-term, although lawmakers must still tackle a projected $3 billion deficit in the next budget cycle of 2028-29.

According to the forecast, which is released twice a year, the state's current surplus is about $2.5 billion in the 2026-27 budget that lawmakers approved this past legislative session.

Heading into that budget, initial projections actually showed Minnesota's 28-29 budget facing a $6 billion deficit, leading Gov. Walz and the divided legislature to pass spending cuts that drastically reduced that number for the so-called "out" years. However, since the end of the session in June, the Minnesota Management and Budget Office has brought those deficit pr

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