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Recent positive economic trends have helped strengthen Minnesota’s state budget.
(Published Apr 15, 2013)
Minnesota Management and Budget released the April Economic Update report on state revenue collections on April 10. The report covers tax collections for the months of February and March. According to the report, Minnesota’s net general fund revenue collections for the two-month period totaled $2.570 billion, which is $145 million (6 percent) more than forecast for that period in the state’s February Forecast.
Receipts from each of the three major taxes exceeded projections. Individual income tax receipts were $57 million (4.9 percent) more than anticipated. According to the report, higher than expected withholding receipts accounted for all the additional revenue. The memo cautions that much of the income tax variance may reflect only one-time differences in the timing of receipts and not a stronger than anticipated economy.
Other tax and non-tax revenues were also above forecast. Sales tax collections were $22 million (3.2 percent) higher than forecast while corporate income tax collections were $47 million (18.2 percent) above forecast. The table below summarizes the changes in major revenues for the February-March period.
The April Economic Update included a short description on the status of the state’s economy. According to the report, strong growth in January and February has boosted Minnesota payroll employment to 2.78 million, 8,000 more jobs than in December 2007, which was the start of the recession. Minnesota employment is now within 1,000 jobs of the February 2008 all-time high. More than 150,000 jobs were lost in Minnesota during the Great Recession. Nationally, the employment recovery has not been as vigorous, with only about two-thirds of the nation’s 8.7 million lost jobs being restored.
Although the February and March collection figures continue a recent trend of improving tax collections, these collection figures will not be immediately reflected in the February state budget forecast baseline revenue projections upon which the Legislature will base the state biennial budget, which must be completed by May 20.
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Contact Gary Carlson
(651) 281-1255 or (800) 925-1122
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