Wintry mix spreads across Minnesota

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 (AP) - Less than three weeks before Department of
Finance officials make key economic predictions, they issued a
monthly tax report showing that the state collected $88 million less
than anticipated in January.

      Monday's update indicates that tax collections were 5.5 percent
below expectations, with income, sales and corporate taxes all
lagging projections made in November.

      Finance Commissioner Tom Hanson said in a memo to Gov. Tim
Pawlenty and legislative leaders that the January tax report should
be interpreted with "great caution."

      "Much of this month's shortfall came from refunds and
miscellaneous payments, items which follow an irregular time
path," Hanson wrote. "Variances for these items can often be
misleading, since the variance does not necessarily reflect any
change in current economic activity."


      A more detailed sketch of Minnesota's economy will become known
Feb. 28, when a twice-yearly budget forecast is released. That
report considers spending and tax patterns.

      That report will determine the amount of money lawmakers have at
their disposal when setting the next two-year budget. 

In November,
a budget forecast predicted a surplus of $2.17 billion through June
2009, though that estimate doesn't account for expected inflation
in all government programs.

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Finance officials say tax collections were 5.5 percent below expectations in January. A fuller economic forecast for the state comes out later this month.

State tax collections slip in January

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