Minnesota Tax Revenue Falls Behind in May

Published On: 15th July 2014

From the internet

Minnesota is known for its high taxes, but the latest legislative session brought with it some tax cuts that made a lot of people happy and others not so much. However, the state felt that revenue would be enough to support tax cuts. However, the $1.4 billion in state taxes that were paid in May fell $17 million short of what state officials predicted. This means that the individual income tax collections fell 2.3 percent, or $15 million, less than what was predicted. Sales taxes almost hit their target, coming in at just $1 million below what was predicted.

But while taxes fell short, other forms of revenue beat their targets by $22 million. This offset some of the decline that was seen by other areas.

So far, the state has brought in $16.8 billion for the fiscal year, but this is around $95 million less than what they had forecast.

While this may seem somewhat grim, Minnesota budget officials warn individuals to take caution when interpreting revenue, which can fluctuate every month. While May fell short, June could be well above its forecast, offsetting some of the shortfall seen in May.

Whether or not June will see more revenue is to be seen, as May was the fourth month in a row that revenues lagged.

In April, combined sales tax, income tax, and corporate tax fell $12 million below forecasts. This followed shortfalls for February and March as well.

It is expected that a more comprehensive analysis will be released in July to give an idea of what is occurring. This is information that could be used in the next legislative session in regards to taxes to ensure that Minnesota remains on the track that it has been on during the recovery from the recession.

Minnesota has been known for quite some time for its high spending and high tax, but also for the fact that its tax and spend model has helped it accelerate post-recession. It has done so well that other states wishing to come out of their slumps are looking to Minnesota for ideas on how to improve what is occurring within their states. They want to follow the model of how Minnesota invests, keeps unemployment down, and they cooperate with their cities.

In the meantime, revenues will be evaluated throughout the year to determine what the next course of action will be in order to ensure Minnesota remains on track. This means that Minnesotans should be vigilant of what happens in the next legislative session regarding their state income taxes.