The final check-in on Minnesota’s finances prior to November’s election shows tax revenue outpacing expectations.
The Department of Minnesota Management and Budget reported Wednesday that tax collections were $282 million, or almost 6 percent, higher than anticipated from July to September. Revenue in all three major tax categories — individual income taxes, corporate taxes and sales taxes — were ahead of benchmark estimates set in February.
Corporate tax revenue was considerably higher, with an extra $88 million, or 25 percent, flowing into coffers. In their report, state finance officials said that was due to higher payments and lower refunds than the state was counting on.
To be sure, there are caveats in the numbers. This quarterly update looks only at the revenue side of the ledger. The next report that also factors in spending patterns won’t be out until early December. But usually when the economy is in strong shape, spending remains in check or slides beneath expectations because there is a smaller demand on social services.
The U.S. economy’s hot streak has contributed to the strong tax hauls as well. The national economy grew faster than state economic consultants forecast back in February. But the outlook for coming years has dimmed slightly, which officials attribute to an expansion that has persisted for an unusually long stretch and trade tensions with America’s partners around the globe.