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The State Revenue Forecast issued in February that reversed a previous projection of a sizable state budget deficit, proved to be far too conservative even though it predicted a $1.6 billion surplus.

A new report issued by the Minnesota Office of Management and Budget shows that general fund revenues for the fiscal year that ended June 30 ended up almost $2.7 billion higher than the level predicted by the February State Revenue Forecast. The total of over $26.5 billion beat the projection by more than 11 percent.

Individual income tax payments were about 12.4 percent higher than projected, sales tax revenues came in 5.5 percent above the forecast, and corporate tax payments exceeded the prediction by over 38 percent. State officials cautioned the numbers are preliminary and will not be finalized until August 20th.

The next state revenue forecast is due out in October or early November and could reflect an improved outlook for the national economy. The state revenue report notes the consultant used by Minnesota for the revenue forecasts is now expecting the US Gross Domestic Product to grow 6.6 percent this year and five percent next year. The February forecast was based on a prediction of a 5.7 percent increase in the GDP this year followed by a 4.1 percent increase in 2022.

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