Minnesota Management and Budget (MMB) announced revenue collections for August are $26 million less than projected. For the FY 2014-2015 biennium (which began July 1), collections are running $46 million behind what was predicted by the February 2013 Forecast.
The story behind the big three taxes, income, sales, and corporate, was mixed. Income tax collections were down $3 million and corporate tax collections were down about $15 million while sales tax collections were up by $30.6 million for August. MMB said that the some of the revenue drop might be attributable to a Labor Day lag in the State’s accounting system.
The amount of the revenue collections here is not the story. In the grand scheme of the $38.3 billion State general fund budget, a $46 million variance is quite small. Rather, we should be wondering if the two months in a row of revenue declines will continue and is this a signal of something happening in the economy. A clearer picture will emerge when MMB publishes its Quarterly Revenue and Economic Update on October 10th and when the Economic Forecast is released at the end of November.
