Handing down her second budget on Tuesday ahead of the November state election, Victorian Treasurer Jaclyn Symes narrowly avoided posting a $200 billion net debt projection.
Net debt is instead expected to hit $175.6 billion by the end of next financial year and top $199.3 billion by mid-2030.
By that point, annual interest repayments to service Victoria's growing debt pile and cash deficits are forecast to rise to $11.8 billion, equating to more than $32 million a day.
The state's operating surplus for next financial year has been shaved from $1.9 billion to $1 billion.
Treasury expects to post operating surpluses totalling $6.8 billion over the next four years and net debt as a share of the state economy to marginally fall from a high of 24.9 per cent in 2026/27.
There were no other major cost-of-living relief measures left to announce after Premier Jacinta Allan splashed billions of dollars in the lead up budget day, including on free and half-price public transport and discounted car registration.
Ms Symes described it as a restrained and responsible Labor budget to make life "easier, safer and more affordable for every Victorian".
She pointed to Victoria joining Western Australia and South Australia as the only jurisdictions in the country with an operating surplus.
"This budget confirms Victoria's first operating surplus in seven years, the only surplus on the eastern seaboard," Ms Symes said in her address to parliament.
Nonetheless, the budget papers show Victoria is forecast to record more than $30 billion in cash deficits over the next four years.
A leading economist warned budget-watchers not to confuse the operating surplus, which includes federal government grants and excludes all spending on capital infrastructure projects, as a cash surplus.
"The bottom line is that until you start running cash surpluses, you can't begin to repay debt - indeed you can't stop adding to debt," independent economist Saul Eslake told AAP.
Three credit rating agencies class Victoria's economic outlook as stable but several have flagged the recent flurry of spending measures could weaken fiscal metrics, if not offset.
Revenue from stamp duty is forecast to fall by almost $900 million next financial year due to a declining property sales stemming from higher interest rates, Ms Symes said.
Despite the Allan government committing to cut more than 1000 public service jobs, treasury estimates employee expenses will rise to $45.5 billion by 2029/30.
Ms Symes pushed back on the suggestion Victoria's public sector wages bill remained out of control, declaring growth was in line with population.
"We back our teachers, our nurses, our police - we want more of these people employed," she said.
Victoria's health system will account for a quarter of budget spending next financial year, the biggest total expense.
Infrastructure spending is slated to continue to dive from its dizzying heights during the COVID pandemic, falling from $24.2 billion in 2023/24 to $15.3 billion in 2029/30.
There remains no completion date for a long-awaited rail line to Melbourne airport, while the contentious Suburban Rail Loop remains on track to cost between $30 billion to $34.5 billion and be completed by late 2035.
VICTORIAN BUDGET SNAPSHOT 2026/27:
* Net operating surplus: $1 billion in 2026/27, $2 billion in 2029/30
* Net cash deficit: $7.7 billion in 2026/27, $8.1 billion in 2029/30
* Employee expenses: $41.1 billion in 2026/27, $45.5 billion in 2029/30
* Infrastructure spending: $19.4 billion in 2026/27, $15.3 billion in 2029/30
* Net debt: $175.6 billion in 2026/27, $199.3 billion in 2029/30
* Interest repayments: $8.9 billion in 2026/27, $11.8 billion in 2029/30
* Unemployment: 4.75 per cent in both 2026/27 and 2029/30
* Economic growth: 1.5 per cent in 2026/27, 2.5 per cent in 2029/30
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