State Tax Collections Down Since July
UNDATED - Minnesota's tax collections are off to a sluggish start to the new fiscal year. State budget officials say were down $97 million from projects since July 1st. Sales tax collections were down 2.3 percent from projections.
St. Cloud State University economics professor King Banaian says it's surprising that we're not buying as much.
That's probably the most surprising part of this because nationally the area where the economy has done the best has been in consumer spending. So softness in the state's tax collections data is a little more troubling than some of the other information there.
Banaian says the economy may be weakening because of uncertainty with the upcoming election, and because of the Brexit vote earlier this year.
Banaian says we need to wait and see what happens during the holiday shopping season before we need to worry too much.
Three months isn't a terribly long time in these forecasts. But, if we get to the end of the year and we still see this kind of softness, event two months after the election is over, I think that will be something to be concerned with. And, of course, the new state legislature would have to deal with that because that budget has to be balanced on June 30, 2017.
On the bright side, the state legislature left a big chunk of cash on its bottom line and has built up a hefty budget reserve.