Rep. Davids Discusses Latest State Budget Forecast

ST. PAUL – Minnesota’s economic officials recently unveiled their latest state budget forecast, and State Representative Greg Davids (R-Preston) said there are good and bad points to be found.

“Due to a surplus being expected for the remainder of the current budget cycle, lawmakers should prioritize common sense tax relief policies such as eliminating taxes on tips or overtime,” Davids said.

For the current biennium, Minnesota is expected to see a $3.7 billion surplus in the current budget year (Fiscal Year 26-27), which is an increase of $1.3 billion from the November forecast. However, for the Fiscal Year 2028-29 budget cycle, a $3.4 billion structural deficit is projected.    

“For the next budget cycle, outgoing expenditures and inflation are currently projected to overwhelm the expected incoming revenues, leading to the deficit projection,” said Davids, who serves as the co-chair of the Minnesota House Taxes Committee. “Conforming to program integrity requirements set by the federal government will also help our Main Street businesses who create and maintain jobs and keep our state financially strong.”

“One thing is certain: tax increases should not be on the table,” Davids continued. “Residents in this state are already overtaxed. If we want to eliminate this projected deficit, we need to eliminate our wasteful spending as well as our rampant fraud problem.”

As many residents are in the process of filing their income tax returns, Davids also noted the House is working hard to quickly approve the pass-through entity (PTE), which would prevent small businesses from losing out on deductions. Passing the PTE now would prevent the need for countless amended returns in the future.