State revenues fell nearly $100 million shy of February’s budget forecast. The Minnesota Management and Budget office is reporting the state’s general fund receipts totaled just under four-and-a-half billion from July through September. That’s $97 million less than projected in the February 2016 Budget and Economic Forecast.
In September, total net revenues were $24 million (1.2 percent) less than forecast, adding to negative variances for the months of July and August.
Net individual income tax receipts were $29 million (1.1 percent) less than forecast for the first three months of FY 2017. Lower than expected gross tax receipts and larger than forecast refunds generated the negative variance. (See page 4 for details.) Payments associated with calendar year 2016 economic activity—income tax withholding and estimated payments—were about $16 million below the forecast.
Income tax refunds for the quarter, which are associated with tax year 2015 filings, were $21 million larger than forecast. That variance, however, may be due to the timing of tax return processing rather than lower tax liability. We will know final tax year 2015 income tax liability after all 2015 tax returns—including returns due October 17 from taxpayers requesting an extension—have been filed and processed. In early November we will estimate 2015 income tax liability based on returns processed to date.
Net sales tax receipts were $28 million (2.3 percent) below the forecast. Lower than expected gross sales tax payments and larger than forecast refunds generated the negative variance.
Lower than expected gross corporate tax payments brought net corporate tax receipts $18 million (5.2 percent) below the February forecast.
The full report can be found here.