Improved economy brings in $463 million surplus, state to repay schools

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With higher-than-expected revenue from state tax collections at the end of the fiscal year, Minnesota can now pay back more than half of its remaining debt to public schools.

The Star Tribune says the state brought in an additional $463 million, which economists attribute to individual and corporate income taxes that exceeded projections.

Minnesota Management and Budget says an increase in individual income tax likely came from wealthy taxpayers shifting income into 2012 to avoid higher taxes in the future, yielding a one-time gain that'll be offset down the road, according to the Associated Press.

By law, any revenue that comes in over projection must go to replenish the state’s reserves and repay school districts.

During the economic downturn, Minnesota drained its reserves and withheld $2.8 billion in payments to school districts to balance the budget, an earlier Star Tribune report noted.

The state is still working on paying down the debt, however Minnesota Management and Budget Commissioner Jim Schowalter said last month that Minnesota is on its best financial footing in years.

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