Minnesota saw a tax gusher in May: $1.8B extra
Minnesota scooped up almost $1.8 billion more in tax revenues in May than were previously projected, the Department of Minnesota Management and Budget reported Thursday.
The eye-popping number is the result of a surging economy and a later than normal income tax filing deadline. To put it in perspective, the amount that came in last month was 119 percent above what state finance officials predicted would arrive when they produced the last comprehensive economic forecast in February.
Almost all of the excess money was in the individual income tax area. Tax payments were due on May 17 instead of April 15 due to pandemic filing accommodations here and nationally. So instead of the anticipated $627 million, the state collected $2.33 billion.
Sales tax payments and corporate tax collections were also up but by much smaller amounts.
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“It’s gratifying to see that we were able to not have to make false choices between keeping our citizens safe and keeping our economy strong. The numbers are there,” Gov. Tim Walz said Thursday as he urged legislators to finish work on a new two-year budget.
For the fiscal year, Minnesota is now just shy of $2.2 billion ahead of its collection pace.
The money can’t necessarily be tapped right away but state leaders will no doubt use it as a guidepost that the state economy is in great shape.
Minnesota is already benefiting from $2.8 billion in federal aid that will flow to the state treasury in the next two years through the American Rescue Plan. And it had a $1.6 billion projected surplus booked on top of that, which lawmakers can use in their decisions.
The update comes as lawmakers are racing to complete a new state budget before a June 30 deadline.
House Speaker Melissa Hortman said in an interview that she, Gov. Tim Walz and Republican Senate Majority Leader Paul Gazelka would be meeting with key chairs and commissioners to push them to finalize remaining budget bills.
She said a special session that will begin Monday will likely last several days or stretch on deeper into June. But she guaranteed a full budget will be in place before July 1, when the lack of one would cause an interruption in services and a layoff of employees.
“I mean there may be some people who want to perform for the cameras who are maybe looking at running for higher office,” said Hortman, DFL-Brooklyn Park. “But in general I would say the vast majority of legislators want to come in, finish and leave.”