Two-month tax total exceeds expectations

04/11/2006

Minnesota’s tax collections in February and March were $114 million higher than predicted in the state’s latest tax-and-spending forecast in late February.

Collections totaled $2.3 billion, up 5.2 percent from the forecast, the Finance Department reported Monday.

“This is some good news,” said Finance Commissioner Peggy Ingison. But Ingison cautioned against inferring that the higher-than-expected collections will continue at the same pace through the remaining 15 months of the state’s two-year budget period.

About $35 million of the higher-than-predicted collections came from corporate income pre-payments that are a strong sign that business executives expect big profits this year. But another $25 million came because businesses have been slow in claiming refunds authorized by a Supreme Court ruling last year. Ingison said the refunds might have to be paid out later this year.

On a year-to-year basis, tax collections for the current fiscal year, from July 1 through March, are up 8.1 percent over the same period from mid-2004 to March of 2005.

—Patrick Sweeney
Pioneer Press