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.

Minnesota's latest economic forecast will be released February 29. In December, the state had an $876 million surplus, but Management and Budget Commissioner Jim Schowalter told the Star Tribune "It’s going to be zero or a negative number because we have so many debts to repay that it is very, very unlikely that we will have a surplus.”

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.

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.

The sour economy dented Minnesota's tax receipts in 2009. But we still moved up in the state rankings of per capita tax revenue.

Republican Sen. Dave Thompson told the Star Tribune he isn't looking to collect more revenue, but feels the current policy is hurting Minnesota retailers, like Target and Best Buy. Supporters of an Internet sales tax argue online retail giants have an unfair price advantage right now.