J.P. Morgan’s prediction of a 60% chance of recession this year has lawmakers in Minnesota on edge as they work to finalize a balanced budget amid potential federal Medicaid cuts. With the possibility of a $6 billion budget deficit looming, legislators and the governor must reach an agreement by May 19 to avoid costly special sessions and a government shutdown. The U.S. Senate’s recent passage of a GOP budget bill could mean $1.5 billion in annual federal Medicaid cuts for Minnesota, adding to the financial strain.
Protests against President Trump’s policies, including new tariffs and cuts, have drawn thousands to the State Capitol and fueled concerns over the economic outlook. Layoffs at the state level, such as the recent 170 job cuts at the Minnesota Department of Health, highlight the financial challenges facing the state. As budget proposals with major cuts are being considered, lawmakers are under pressure to find ways to “right size government” and navigate through the uncertainty of federal aid reductions. It remains to be seen how Minnesota will weather the economic storm ahead.
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