Minnesota Mayors Sound Alarm Over State’s Fiscal Management as Surplus Vanishes

Nearly 100 Minnesota mayors have issued a collective warning to state officials about deteriorating fiscal conditions they say are harming local communities and pushing residents to leave the state. The group of 98 mayors expressed deep concern over the disappearance of an $18 billion surplus and the emergence of a projected $2.9 billion to $3 billion deficit for the 2028-29 biennium.

In their letter addressed to Governor Tim Walz and state lawmakers, the mayors painted a troubling picture of how state-level financial decisions are cascading down to local governments.

“Fraud, unchecked spending, and inconsistent fiscal management in St. Paul have trickled down to our cities—reducing our capacity to plan responsibly, maintain infrastructure, hire and retain employees, and sustain core services without overburdening local taxpayers,” the mayors wrote.

The coalition highlighted several mounting challenges facing Minnesota communities, including workforce shortages, slowed business investment, and escalating operational and construction costs. Perhaps most concerning, they noted that families are increasingly choosing to leave Minnesota altogether, further eroding the state’s economic foundation.

Property tax increases loom on the horizon as cities struggle to absorb costs shifted from the state level. The mayors pointed to a fundamental disconnect between decisions made at the state capitol and their impact on local governments.

“When the state expands programs or shifts responsibilities without stable funding, it is our residents—families, seniors, businesses, and workers—who ultimately bear the cost,” the letter stated.

These unfunded mandates span various sectors including education, health and human services, and public safety, placing significant strain on municipal budgets already stretched thin.

Republican lawmakers have seized on the letter as evidence of mismanagement by Governor Walz and his Democratic colleagues in the legislature. State Senator Andrew Lang, who serves as the Lead on the Senate State and Local Government Committee, placed blame squarely on the administration’s fiscal approach.

“Governor Walz and Democrats passed unaffordable spending and tax increases along with unfunded mandates on the promise it would make life more affordable,” Lang said in a statement. “In reality they just passed down the costs to local governments, schools, and small businesses, who in turn pass down costs to local taxpayers and consumers.”

The mayors’ concerns reflect broader economic trends affecting Minnesota. The state has recently slipped in national economic rankings, suggesting systemic issues beyond normal economic fluctuations. The state’s budget trajectory—moving from substantial surplus to significant deficit in a short timeframe—has raised red flags about long-term fiscal sustainability.

The letter also referenced Minnesota’s statutory requirement for a balanced budget, suggesting that current practices of relying on one-time surplus dollars have created structural problems that will prove difficult to address without significant policy changes.

This outcry comes amid ongoing scrutiny of state-level financial management, including concerns about fraud in various Minnesota programs. Recent investigations have revealed potential fraud schemes that could cost taxpayers billions, further complicating the state’s financial outlook.

“Our state owes it to our citizens to practice responsible fiscal management and to stop taxing our families, seniors, and businesses out of Minnesota,” the mayors concluded. “We urge the Legislature to course-correct and to remember that every dollar you manage belongs not to the Capitol, but to the people of Minnesota.”

The widespread nature of this mayoral coalition—representing nearly 100 communities across the state—suggests these fiscal concerns transcend partisan politics and reflect genuine anxiety about Minnesota’s economic direction. As state officials prepare for upcoming budget sessions, this unified municipal voice adds significant pressure for meaningful fiscal reforms.