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State Representative Tim Kelly
100 Rev. Dr. Martin Luther King Jr. Blvd.
651-296-8635
For more information contact: Jason Wenisch 651-296-2317
NEWS COLUMN
REVENUES INCREASE, BUT DEFICIT REMAINS
Good news from the Capitol! Minnesota received an updated economic forecast recently – and the numbers are improving. They’re not positive enough to eliminate the $6.2 billion budget deficit, but positive nonetheless.
As it stands today, Minnesota now faces a $5.1 billion deficit. State economists project that incoming Minnesota revenues have exceeded expectations by $984 million. Income and sales tax collections are on the rise, and 65 percent of this new revenue is based on capital gains. A major reason for this can be attributed to Congress’ decision to extend the federal tax cuts.
As lawmakers, we certainly appreciate this news. It also serves as proof that if you can reduce the pressure of taxes on consumers and business owners, the economy can improve.
It appears this revelation has even made Governor Dayton see the light. Following the revised economic forecast, Dayton, who had previously asked to increase taxes by $4 billion in order to eliminate our projected budget deficit, dropped his idea for a 5th tier tax bracket.
It’s nice to see the governor rethinking his stance based on facts. My hope is that he’s looked at what’s happening to Minnesota’s economy and why, and has come to the conclusion that taxing is not the appropriate way to go.
What’s clear is that an increase in state government spending has caused the projected deficit. Once again, the economists say our tax collections will increase by 8.8 percent over the next two years, while our projected spending will skyrocket by 29 percent.
The legislature will now press ahead with a plan that will balance the budget, and it will do so without raising taxes. Moving forward, I’d advise you not to get caught up in the “spending cuts” rhetoric. When you look at our total budget, we spent $32 billion dollars last biennium and our revenues now stand at $33.5 billion. Let's see if we can actually live within our means.
News Items
- CONFERENCE COMMITTEES SHAPING IMPORTANT BILLS AT LEGISLATURE - (Posted: 2012-04-05 00:00:00)
- TAX RELIEF AND JOB CREATION BILL APPROVED IN MINNESOTA HOUSE - (Posted: 2012-03-22 00:00:00)
- MORE GOOD NEWS FOUND IN LATEST STATE BUDGET FORECAST - (Posted: 2012-03-06 00:00:00)
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