The overall $3.75 billion in revenue for the quarter was $41 million, or 4 percent more than forecast in February, according to the Minnesota Department of Management and Budget [MMB] economic update. The largest source of money, the individual income tax, brought in $1.994 billion, which was $42 million more than forecast. That was achieved despite a $10 million dip in the expected withholding receipts. Growth in estimated payments and smaller refund payments were key parts in the rise in income tax collections.
The corporate income tax significantly beat the forecast by $41 million, or 15 percent, to finish the three-month period at $309 million. Most of the increase was from better than expected estimated tax payments.
The “other” category of revenue saw a $45 million increase compared to the forecasted amount to end the quarter at $420 million. Most of the increase was an unanticipated $26 million transfer from the general fund of excess surplus in the state’s assigned risk workers’ compensation plan. Deed and mortgage tax receipts saw a $20 million positive variance due to stronger than anticipated home sales and in increase in mortgage financing.
The books closed on the 2012 fiscal year on June 30 with $16.4 billion in revenue, which was $299 million, or 1.9 percent more than forecast. The year-end number was adjusted down by $37 million, however, from MMB’s July economic update.
The U.S.’s recovery from the Great Recession has been slower than hoped for. Real GDP has averaged an anualized 2.2 percent since mid-2009, according to MMB. The state’s macro economic forecaster Global Insight expects real GDP to grow at 2.1 percent annual rate in 2012.
With less than a month before the election, Senate Majority Leader Dave Senjem sent out a press release to claim the numbers are evidence of his party’s management of the state budget.
“This economic update is once again excellent news for Minnesota. It shows that our streamlined budget, not the burden of increased taxes, is best for Minnesota,” Senjem said. “This strong pattern of good economic growth shows that Republican governing and the decisions of the last biennium were fiscally sound.”