state + local
Strong sales tax collections in May boost state budget
- Updated: June 11, 2012 - 9:03 PM
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Stronger than expected sales tax collections for May helped Minnesota's budget outperform estimates by state finance officials for the month.
The state's general fund took in $1.3 billion last month, $32 million more than what had been forecast. Since February, tax revenues have surpassed estimates by $148 million, according to a new report by Minnesota Management and Budget Commissioner Jim Schowalter.
"For the state budget, that's a good thing," said state Sen. Sean Nienow, R-Cambridge, vice chairman of the Senate Finance Committee. "The increased sales tax clearly is a good thing. It shows people are spending money."
Minnesotans paid $380.3 million in sales tax in May, $37.4 million more than expected.
Tax collections from businesses surpassed predictions nearly twofold, coming in at $42.9 million.
Individual income taxes fell far below estimates, totaling $544.5 million. That's $56.2 million below estimates, but budget officials said they do not expect final income tax collections to be below projections.
Other revenue sources came in $32 million higher than expected, totaling $333.1 million.
State budget officials warned not to make too much of the monthly report, which can fluctuate wildly. A more complete three-month report will be out after June revenue numbers are in.
Legislators and state officials watch the reports closely to get a sense what the upcoming budget battle could look like. With tax revenue beating estimates, legislators returning early next year to craft a new two-year budget are not likely to face the additional headache of a projected budget deficit.
Under state law, any budget surpluses must be used to repay the more than $2 billion owed to K-12 public schools.
BAIRD HELGESON
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