(The Center Square) – In the first three months of fiscal year 2022, Minnesota accounted for $657 million more in government revenue than forecasted in February of 2021.
The Minnesota Management and Budget update shows all tax revenue exceeded expectations, with a total of 12.4% more than forecasted in 2021. Net individual income tax receipts were $155 million, 5.1% more than forecasted, while income tax withholding receipts were $153 million higher than forecast. Income tax refunds were $46 million lower than forecast. Net corporate tax receipts were $361 million 90.5% above the forecast and 46% higher than the same period one year ago.
The report said while some tax revenue exceeded expectations, other tax refunds were lower than expected, but that might be a matter of timing. The report noted a weaker outlook for U.S. real Gross Domestic Product (GDP) since the Feb. 2021 economic outlook, citing two factors of the delta COVID-19 strain and supply chain disruptions expected to be resolved in 2022.
In an October forecast, IHS Markit (IHS), Minnesota’s macroeconomic consultant, expects annual real GDP to grow 5.4% this year and 4.3 percent next year, compared to 5.7% and 4.1% in their February forecast. For years 2023 and 2024, IHS anticipates growth of 2.8% in 2023, 2.7% in 2024, and 2.5% in 2025.
Lawmakers anticipated disbursing $1.1 billion in federal money in the 2022 session that begins Jan. 31. However, Minnesota still owes the federal government $1.1 billion to cover unemployment benefits.