(Josh Skluzacek, KSTP) – Minnesota’s budget surplus remains at an estimated $2.4 billion, according to the latest state forecast, but officials are warning of a possible deficit on the horizon.

Minnesota Management and Budget (MMB) released the new estimate Wednesday morning. The state’s budget commissioner and economist, as well as Gov. Tim Walz and legislative leaders from both the DFL and GOP, are set to discuss the latest forecast Wednesday afternoon.

The latest projection comes two months after MMB noted increased revenue adjustments and slightly lower spending from its end of the biennium report, which put the recalculated projected surplus at around $2.4 billion in October, up from nearly $1.6 billion in May.

A short summary released by MMB Wednesday morning cites higher projected spending in health and human services and education in the coming biennium, which could create a budget imbalance despite increasing revenue.

The surplus stood at a state record of $17.5 billion back in February when the legislature was in session, but much of that was used by laws passed during this year’s session, one in which the DFL controlled the Minnesota House, Senate and governor’s office for the second time in 31 years — and the first since 2013-14. Among some of the major bills approved by state lawmakers and signed into law this year were an increase in education spending, funding to combat homelessness, food insecurity and make child care more accessible, and legislation to create a paid family and medical leave program, which has already seen its projected costs rise.

House Minority Leader Lisa Demuth (R-Cold Spring) released a statement following the latest forecast saying, in part, that the DFL is “leading the state off a fiscal cliff.”

The state is expected to release a new projection again in February.