Government Affairs Director
Ewald Consulting
MASA Lobbyist
Minnesota politics have been unusually turbulent over the summer and fall. The heartbreaking murder of Representative Melissa Hortman and her husband Mark, the shooting of Senator John Hoffman and his wife Yvette, and the shooting at Annunciation school renewed debate over issues like gun control and student safety. Concerns about fraud, the impact of federal budget cuts, and a difficult budget forecast make for a challenging environment heading into the 2026 legislative session. All these factors will influence decisions made during the next session.
Budget Forecast Highlights Future Budget Challenges
Minnesota Management and Budget (MMB) released the November Budget and Economic Forecast early December, offering the first official outlook of the state’s budget outlook ahead of the 2026 legislative session. The report shows that stronger-than-expected revenue collections resulted in a projected $2.465 billion surplus for the current biennium but an almost $3 billion budget deficit in the next biennium.
For the education spending side, the forecast showed that E-12 spending is projected to be $115 million higher in the current biennium than initially planned, primarily due to rising special education costs (staff salaries and benefits).
Governor Tim Walz and DFL legislative leaders emphasized that Minnesota’s fiscal position is comparatively strong, crediting responsible budgeting and steady economic performance. They attributed the longer-term deficit projections to national economic trends and recent federal policy changes, including the federal budget bill passed last June. Republican leaders took a different view, arguing the projected deficit stems from overspending during the DFL trifecta and inadequate oversight of fraud. All acknowledged the fiscal constraints heading into the 2026 legislative session.
Governor Walz and legislative leaders will use this forecast to begin shaping proposals for a supplemental budget, though the Legislature is not required to pass one this next session.
Shifting Legislative Landscape
A combination of retirements, special elections, and campaign announcements for statewide and federal offices will reshape the look for the legislature next session and into the 2027 legislative session.
Two especially notable retirement announcements are Senator Steve Cwodzinski (DFL-Eden Prairie), chair of the Senate Education Policy Committee, and Representative Ron Kresha (R-Little Falls), the co-chair of the House Education Finance Committee. With their retirements, the education committees will be seeing new faces in these leadership positions next year.
Education Issues on the Horizon
While it is too early to know which proposals will gain traction, several education issues are expected to draw attention this next session. School safety and student mental health will likely be a prominent topic given recent events, alongside ongoing discussions about special education funding and compensatory revenue. Workforce challenges and labor issues are likely to employers, including school districts, navigate the rollout of the state’s new paid leave program.
Additionally, several interim working groups established last session will provide recommendations for the legislature to review. While the Blue Ribbon Commission on Special Education has a longer timeline, the others are expected to deliver initial findings or recommendations to lawmakers during the upcoming legislative session, including the Compensatory Revenue Task Force, the Seclusion Working Group, and the Developmental Delay Working Group.
As the Legislature prepares for a busy session, which begins February 1, 2026, and is expected to go until May 18, 2026, we can expect both challenges and opportunities. We’ll continue to keep you informed and advocate for your interests throughout the session.