Minnesota sees tax spurt in January

Minnesota state government far exceeded its revenue projections for January, another sign that lawmakers could wind up with a projected surplus to spread around rather than have to deal with a deficit this spring.

Tax collections last month were almost $350 million, or 16 percent, stronger than expectations. That bodes well for an all-important economic outlook that will be released later this month. The upcoming comprehensive tax-and-spending report will set the bar for the legislative session.

Officials always caution about reading too much into the monthly figures because they don't go in-depth about spending patterns. But it is the latest report that suggests a shift in fortunes; collections for November and December were a combined $219 million ahead of earlier projections.

In early December, officials had forecast a slight deficit of $187 million. But that estimate came with considerable caveats surrounding the lack of a federal tax cut bill, which has since passed, and uncertainty over funding for a children's health program, which has now been restored by congressional action.

Last month's strong tax haul was based largely on individual income tax collections. Corporate tax receipts were also up. Sales tax collections were down.

Minnesota lawmakers won't be crafting a new state budget this year but they will be reexamining spending levels on some programs and adjusting to the state implications of the federal tax overhaul.

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