State tax collections slip in January
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(AP) - Less than three weeks before Department of Finance officials make key economic predictions, they issued a monthly tax report showing that the state collected $88 million less than anticipated in January.
Monday's update indicates that tax collections were 5.5 percent below expectations, with income, sales and corporate taxes all lagging projections made in November.
Finance Commissioner Tom Hanson said in a memo to Gov. Tim Pawlenty and legislative leaders that the January tax report should be interpreted with "great caution."
"Much of this month's shortfall came from refunds and miscellaneous payments, items which follow an irregular time path," Hanson wrote. "Variances for these items can often be misleading, since the variance does not necessarily reflect any change in current economic activity."
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A more detailed sketch of Minnesota's economy will become known Feb. 28, when a twice-yearly budget forecast is released. That report considers spending and tax patterns.
That report will determine the amount of money lawmakers have at their disposal when setting the next two-year budget.
In November, a budget forecast predicted a surplus of $2.17 billion through June 2009, though that estimate doesn't account for expected inflation in all government programs.
(Copyright 2007 by The Associated Press. All Rights Reserved.)
