I was encouraged by recent fiscal news from state economists. According to the Minnesota Department of Finance, net general fund revenues totaled $2.318 billion in February and March, which is $98.8 million more than was previously forecast.
The good news is the state is collecting more than it expected. The bad news is we're still looking at a huge deficit next year if we don't alter our spending habits."
Receipts from the individual income, corporate income, and motor vehicle sales taxes were all above projections while net sales tax receipts were below February's estimate.
The Minnesota House recently approved a supplemental budget plan that's designed to eliminate a $935 million deficit, but the plan is controversial as it includes a $232 million tax and fee increase on businesses and relies heavily on one-time spending. Overall government spending was only reduced by $128 million in the plan. The House has yet to reach consensus with the Minnesota Senate on compromise budget legislation.
While this latest fiscal news reduces this year's deficit, state economists continue to predict a $1 billion deficit for next year even if this budget bill becomes law. We still have a lot to accomplish in terms of balancing the budget before our legislative work ends for the year.
