An earlier than expected payment from the state of Wisconsin for income tax reciprocity helped Minnesota finish the 2011 fiscal year on June 30 with more money than expected. But during the first two months of the current fiscal year, collections are down a net $93 million, or 4.4 percent, from previous projections, according to the Minnesota Department of Management & Budget.
The state ended the fiscal year with $355 million more than projected in the February economic forecast. More than half of that was from larger-than-expected 2010 income tax collections. Minnesota also reaped $60 million from Wisconsin, which paid the money it owned to Minnesota sooner than anticipated.
The collections for the 2012 fiscal year were negatively affected by “timing differences” of processing and posting receipts caused by the government shutdown in July and the start-up of a new state accounting system. Also, the fact that the Wisconsin payment came early put a dent in the state’s revenue projections for 2012.
On the positive side, individual income, corporate income and sales tax receipts were slightly higher than forecast.
Minnesota’s macroeconomic consultant Global Insight, Inc., is forecasting slower growth in gross domestic product compared to the February forecast. Global Insight strikes a gloomy tone in stating the nation’s economy is “dangerously close to stall speed.”