ST. PAUL, Minn. – A new report from the Minnesota Department of Management and Budget revealed that the state’s revenue gap continues to grow.
The net general fund receipts from fiscal year 2017 are now $104 million under the state’s forecasts released in February, according to the report.
This is entirely driven by the severe underperformance of income tax revenue for the state, as that drags down the above expected numbers from general sales taxes, corporate franchise taxes, and other revenues.
“Data from the Quarterly Census on Employment and Wages (QCEW) now suggests that Minnesota wage and salary income grew about one percentage point more slowly in 2016 than we had forecast in February,” the report states. “That is consistent with tax year 2016 net income tax receipts coming in short of forecast. In addition, non-wage income—particularly capital gains— may have grown more slowly in 2016 than we had forecast.’
General sales tax incomes are thus far $13 million above projections, corporate franchise taxes came in $59 million above projections, while other forms of revenue performed the best as the state collected $84 million more than projected from these sources in the 2017 fiscal year.
But even all this was countered by the fact that individual income tax income for Minnesota was a woeful $260 million under expectations.
While the state is still underperforming, it has made up some ground from revenue report released regarding May’s totals. Then the state was a total of $126 million in the whole, roughly 0.7 percent under February’s revised expectations. The current $104 million deficit is now just 0.5 percent under expectations, as the state has a total income now of $20.949 billion for the fiscal year.
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