The last forecast projected a surplus of around $1.5 billion.
The COVID-19 pandemic has erased the state's budget cushion, Minnesota Management and Budget reported Tuesday.
The agency said it now projects a nearly $2.43 billion deficit for the current two-year budget period, which runs through mid-2021. That's almost a $4 billion plunge from a February forecast that projected a $1.5 billion surplus.
The projected deficit is slightly larger than the state's budget reserve of nearly $2.34 billion, which the state can tap to cover the hole in the budget.
Budget officials have been warning for the last few weeks that the pandemic would upend its budget projections, and finally quantified the damage Tuesday. The agency said the economic shock of the pandemic has sharply cut tax revenues by $3.6 billion, while emergency measures have pushed projected spending $391 million higher.
"Given the uncertainty about the path of pandemic, the economic outlook will remain volatile for some time," the agency said in a brief statement.
Budget Commissioner Myron Frans and Gov. Tim Walz plan to provide more details Tuesday afternoon.
Walz is also expected Tuesday to ease the financial burden on health care providers by allowing them to resume elective surgeries and procedures.
A temporary ban on them, which was implemented to preserve supplies of personal protective equipment, has cut into the bottom line of medical and dental providers.
Walz extended a statewide stay-at-home order until May 18 to reduce the spread of the coronavirus, but he has been slowly exempting more businesses.
The Minnesota Department of Health on Tuesday reported 617 new confirmed cases, the state's highest one-day total yet. That's up 46 from Monday to raise the state's total to 7,851, but officials say those numbers are much lower than the actual number of coronavirus infections because not everyone gets tested or shows symptoms. Minnesota's death toll rose by 27 to 455. Hospitalizations hit new highs, with 434 patients hospitalized as of Tuesday, including 182 in intensive care.