The Minnesota Legislative Session for 2025 concluded on May 19th without the completion of the state budget, leading to a potential special session. Before adjourning, an agreement was reached among the House, Senate, and Governor on “joint budget targets,” which set spending and revenue levels for the upcoming fiscal period.
These joint targets outline a state budget of approximately $66.5 billion for Fiscal Years (FY) 2026-2027, which is nearly $5 billion less than the previous budget. The plan includes a net reduction in spending by $283 million in FY 2026-2027 and about $1.8 billion in FY 2028-2029 compared to projected expenditures. This would result in an estimated $1.9 billion surplus for FY 2026-2027 and reduce the projected deficit by about $2.2 billion in FY 2028-2029 if inflation is not considered.
Despite these agreements, many budget areas were incomplete at adjournment. An accord was signed by legislative leaders and the Governor to continue negotiations through informal “working groups” to finalize pending bills efficiently.
Currently, most committees have agreed on their respective budgets with some issues remaining unresolved. Once all agreements are formalized into legislation, Governor Walz will call a Special Session aimed at passing these measures promptly to avoid complications as the fiscal year concludes.
