Minnesota tax revenue beats target by $145 million
- Blog Post by: Baird Helgeson
- October 10, 2012 - 5:13 PM
Minnesota tax collections beat estimates by $145 million over the last three months as the strengthening economy caused consumer spending to rise.
The state took in $3.75 billion from taxes and other revenue in the first quarter of the 2013 fiscal year, 4 percent more than budget officials predicted, according to Minnesota Management and Budget.
All four major areas of revenue beat the estimates. Income tax collections were up $42 million, to $1.9 billion. Sales tax revenue edged up $17 million, to $1.02 billion. Corporate tax collections saw the largest percentage gain, up $41 million, or 15.3 percent.
An extra $45 million in other revenue came from an unexpected surplus from the workers’ compensation plan and stronger than expected mortgage and deed taxes from home sales and mortgage refinancing.
Since February, revenue has exceeded projections by $444 million.
Budget officials warned that the economic rebound has not met expectations, however.
“The U.S. economy has not performed as well as hoped since the end of the Great Recession,” according to Minnesota Management and Budget. “We have escaped the downward spiral.... But we have not, as yet, been able to shake off the economic inertia produced by the longest and deepest recession in the post-war period.”
Minnesota Management and Budget officials still see signs the economy will continue improving.
“Consumer confidence has increased, auto sales are more than 50 percent above their lows, and housing starts, while still at disturbingly low levels appear to be recovering,” according to the agency.
However, the agency said, slow global economic growth and political uncertainty at home and around the country could be a drag on growth through next year.
The upbeat revenue assessment does not include a look at state spending, so it does not paint a complete picture of the state’s budget.
A more nuanced look at state finances will come in early December when state officials release the state budget forecast.
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