Tax receipts for August beat projections by 3.5 percent. Minnesota Management and Budget reports revenue from sales taxes and individual income taxes was strong. It's a turnaround from July, when revenue was lagging.
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Minnesota Management and Budget officials say revenue from both income and sales tax are more than originally forecast. The latest projections in February showed Minnesota had a $323 million surplus.
Management and Budget Commissioner James Schowalter says better-than-expected sales tax collections last month helped pad Minnesota's budget. Since February, tax revenues have surpassed estimates by $148 million. An economic update will be released next month and a new budget forecast will be issued in November.
Revenue from Minnesota taxes came in more than two percent ahead of expectations in the fiscal year that ended June 30th. A top budget official says the extra $336 million is good news, but doesn't really clear up the clouds on the economic horizon. The state still faces a $1 billion shortfall in the two-year budget that starts next summer. And forecasters are getting less optimistic about the prospects for growth.
Revenue to Minnesota's general fund during the last two months of 2011 beat the forecast, thanks largely to more people working. Spending remains tight, though, and sales tax receipts are lagging.
The sour economy dented Minnesota's tax receipts in 2009. But we still moved up in the state rankings of per capita tax revenue.
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