Usually, the Minnesota Budget and Economic Outlook is a chart-laden oracle in PDF form, shaping the stories politicians tell about the state’s economy and determining how much the Legislature can spend on favored policies. 

But the outlook that Minnesota Management and Budget released Friday could be limited in how much it guides lawmakers who are juggling competing policy priorities and an upcoming election. 

On the surface, the forecast is positive. At the end of the state’s two-year budget cycle, June 30, 2027, Minnesota is predicted to have a budget surplus of $3.6 billion. 

And even at the end of the next two-year budget cycle, the state is anticipated to enjoy a $377 million surplus. This is a far cry from last February’s forecast that anticipated a $6 billion budget deficit in 2029.

“I’m going to leave the state in good shape,” outgoing Gov. Tim Walz told reporters Friday in St. Paul. 

However, officials from Minnesota Management and Budget cautioned that the outlook does not take into account funding that the Trump administration is attempting to take from Minnesota. 

Federal officials said Wednesday that they would claw back $259 million in Medicaid funding from the state. This is on top of $2 billion the Trump administration previously threatened to cut from Medicaid, and a $467 million cut in child care funds that is tied up in court. 

“This forecast comes with the biggest asterisk ever,” said House DFL Leader Zack Stephenson of Coon Rapids. 

State officials also professed uncertainty about what is next regarding federal policy on tariffs and immigration. And forecast authors acknowledged that data “will not be available for several months” to account for the economic impact of Operation Metro Surge. 

Meanwhile, Republicans who are a one-vote minority in the Senate and share power in the House, may focus the session on a pair of tax cuts.