October Tax Revenues Below Forecasts in Minnesota

By Avsankur© (Own work) [CC BY-SA 4.0 (https://creativecommons.org/licenses/by-sa/4.0)], via Wikimedia Commons

Minnesota revenue expectations continue to fail to meet forecasts, as laid out in a memo from Myron Frans, the Commissioner of Minnesota Management and Budget.

The memo lays out that October’s revenue forecasts were slightly optimistic, as there was a $25 million shortfall last month. The $1.61 billion total in income is about 1.5 percent less than the forecasted numbers.

Net corporate tax receipts had the biggest shortfall, both in terms of total revenue disparities, and in terms of the percentage forecasts were off by. While the adjusted forecast for October expected $63 million in revenue, the real numbers fell $9 million short of that, at $54 million. This is more than 14 percent less than expected. Frans’ memo chalked that up to being driven by lower than expected gross tax payments from corporations.

Individual income tax revenues for the month totaled $716 million, roughly $4 million lower than expectations. General sales tax revenues were $7 million below expectations, at a total of $485 million.

The 1.5 percent shortfall actually brings the average for the year up. Returns for the first quarter of the 2017 fiscal year found the state failing to meet revenue expectations by about 2.1 percent.

Now the year-to-date receipts are at an even two percent under expectations, a total of $122 million under expected revenues.

The memo was addressed to Gov. Mark Dayton, Lt. Gov. Tina Smith, as well as Speaker Kurt Daudt, House Minority Leader Paul Thissen, Senate Majority Leader Tom Bakk, and Senate Majority Leader David Hann.