Minnesota economy beating estimates, budget officials say

  • Article by: BAIRD HELGESON , Star Tribune
  • Updated: January 10, 2012 - 8:42 PM

Lower unemployment means more is coming from the state income tax, especially in the last two months of 2011.

Minnesota appears to be lifting itself out of the economic doldrums a little faster than expected.

Minnesota's general fund revenues totaled $2.91 billion in November and December, about $62 million more than what state budget officials had predicted.

State finance officials attribute the healthy numbers to stronger-than-expected income tax payments, in part reflecting the state's lower unemployment numbers. Individual income tax receipts were $25 million better than forecasted.

Minnesotans were not spending a lot more, however. Sales tax receipts for the last two months of the year were $1 million less than forecast, and corporate tax receipts were $8 million above forecast.

General fund revenue was 6 percent better than during the same two months of 2010.

State and national economists say the chance that the United States will slip into another recession this year has become far less likely than they predicted last summer.

Consumers are increasingly confident and the labor market continues to improve, the state said.

Economists have not entirely ruled out another recession.

"Forecasters continue to expect subpar growth during the remainder of 2012, leaving the U.S. economy with little cushion against an unexpected shock," budget officials said in a statement.

Economists are particularly concerned about the European debt crisis. "While most believe that the current U.S. recovery will be sufficiently robust to withstand a mild recession in Europe, a more severe European recession could end the current U.S. economic expansion," budget officials said.

Baird Helgeson • 651-222-1288

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