There are plenty of mixed messages about the state of Minnesota’s economy. The most recent information from Minnesota Management and Budget offers some positive news. May revenues were $56 million above what was forecasted, or 6.3 percent. According to the state, most revenue categories – individual income tax, sales tax, corporate income tax and other revenue – were up in May. The only major revenue source that dipped slightly below estimates was motor vehicle sales tax.
But don’t get too excited – indications continue to point to a slow, plodding recovery. For example, read Politics in Minnesota’s interview with State Economist Tom Stinson, who notes that the job picture is not as robust as hoped, and as the state closes out the books on 2009, last year’s revenue collections will likely be below projections. It seems that the $5.8 billion deficit forecast for the FY 2012-13 biennium ($7 billion if you count inflation) is not likely to change soon. Those who would be governor will face tough, tough decisions ahead.
Keep in mind that the May revenue snapshot is very preliminary and could change. The May numbers indicate whether state revenues are following the official economic forecast, last issued in February. The state’s February economic forecast is still the official measuring stick for the state budget until the November forecast is released this fall.