Minnesota's Management and Budget Commissioner Myron Frans is out with the latest economic forecast, which shows the budget surplus has gone down by about a half a billion dollars.
In a statement Thursday, Frans said that the state's budget and economic outlook have weakened since the previous forecast in December.
The agency says slower projected economic growth and lower tax collections have reduced the revenue forecast, though a slightly lower spending forecast offsets the overall reduction to the projected surplus.
This new number could force Democratic Governor Tim Walz to make some changes to his nearly 50 billion dollar budget proposal.
"This is the last piece they need to inform the discussion and debate over which programs to fund or which programs not to fund going forward," said WCCO radio political analyst Blois Olson.
"Now legislators have no excuse to not to get down to work on the budget, and since all the leaders of the parties have said they want to be done on time and they want to do it in a transparent manner, they really do have to roll up their sleeves."
Legislative leaders and Governor Tim Walz's administration will use the updated forecast to set final spending and revenue targets as they hammer out a two-year budget before the session adjourns in late May.
To see the preliminary economic forecast click here.
This story is developing, and we expect to hear from leaders from both parties throughout the day.