Minnesota Revenues Fall Short of Forecast

Minnesota collected $3.78 billion in general fund revenues during February and March 2026, falling $182 million, or 4.6 percent, below the state’s February forecast, according to Minnesota Management and Budget. The shortfall was driven largely by weaker-than-expected individual income tax collections, which came in $126 million below projections due to significantly higher refunds. Corporate tax revenues and other revenue categories also underperformed, while sales tax receipts provided a modest bright spot, slightly exceeding expectations. Overall, the variance leaves fiscal year-to-date revenues tracking 0.8 percent below forecast, signaling softer-than-anticipated collections despite relatively stable consumer spending.

Minnesota’s Macroencomic Consultant Predicts Softer Economy in 2026

In its April 2026 forecast, Standard & Poor’s Global Market Intelligence (SPGMI), Minnesota’s macroeconomic consultant, predicted that the U.S. economy has weakened slightly since Minnesota’s February Forecast. Updated forecasts now show U.S. economic growth slowing to 2.1 percent in 2026, with higher inflation, rising unemployment, and sluggish job growth expected to weigh on activity. Analysts point to elevated energy prices, ongoing trade uncertainty, and cooling labor market conditions as key risks. While a recession is not currently projected, the outlook suggests continued pressure on consumer spending and business investment, leaving Minnesota’s budget outlook sensitive to national economic headwinds in the months ahead.

Addressing Impacts of Artificial Intelligence

As artificial intelligence (AI) becomes increasingly ubiquitous in our society, the Minnesota legislature has taken steps to regulate the technology in different ways. For example, it previously passed a law prohibiting use of AI in campaign ads in certain circumstances. During the current legislative session, many bills have been introduced to limit use of AI or mitigate AI’s impact. Despite the good intention of these initiatives, they have created a piecemeal approach to AI regulation. In response, more than two dozen entities sent a letter to Governor Walz and legislative leaders expressing their frustration with this disjointed approach. In addition to calling for a “pause” on AI regulations this session, the groups “urge the Legislature to take a more structured and collaborative approach moving forward…includ[ing] the creation of dedicated AI subcommittees in both the House and Senate with primary jurisdiction over AI-related policy, with mandatory referral for any AI bill.”

Lawmakers Consider Food Shelf Funding

Hunger relief advocates have been warning legislators that Minnesota food shelves are under intense strain as demand reaches historic levels, with nearly 9 million visits annually according to statewide data compiled by The Food Group in partnership with state agencies. As a response, lawmakers are considering proposals to increase funding for the Minnesota Food Shelf Program (MFSP) and provide more direct support to food banks. In the House, H.F. 3624, which is in the Ways and Means Committee, includes approximately $5.4 million in ongoing funding for the MFSP, while funding in the Senate will be added to the Health and Human Services supplemental budget bill. Despite these efforts, advocates say these measures may still fall short, particularly as recent federal SNAP benefit cuts push more families to rely on charitable food programs. With budget constraints and competing priorities complicating the debate, policymakers are confronting a widening gap between need and resources, leaving food shelves as an essential, but increasingly overburdened, safety net.

Partisan Spat over Impeachment

On April 15, the House Rules and Administration Committee held a hearing on Republican-backed resolutions to impeach Governor Tim Walz (and separately Attorney General Keith Ellison), led by GOP Representatives Drew Roach, Ben Davis, and Mike Wiener. The effort centered on allegations that the administration failed to adequately respond to a major fraud scheme and retaliated against whistleblowers, with testimony from Faye Bernstein, a state employee who works at the Department of Human Services. DFLers forcefully disputed the claims, and the committee ultimately deadlocked 8–8 along party lines, preventing the resolutions from advancing and leaving the impeachment effort stalled for now. Matt Gehring, director of House Research, outlined how impeachment works under Minnesota law, noting that impeachment is governed by the state constitution—not statute—with the House holding the power to impeach and the Senate responsible for conducting any trial, requiring a two-thirds vote for conviction.

April 17, 2026