ST PAUL, Minn. — Minnesota Management and Budget (MMB) said tax revenues from the pandemic-delayed July tax deadline came up short of projections, putting the 2020 fiscal year in a $58 million shortfall.
In a letter to Gov. Tim Walz and Lt. Gov. Peggy Flanagan, MMB commissioner Myron Frans said income tax payments due on July 15 came up $226 million below previous projections, moving the state's estimated closing variance for the fiscal year from positive to negative territory.
In addition to the 2020 fiscal year update, MMB also released a forecast for the 2022-23 biennium that projects a $4.7 billion shortfall due to lower revenue and higher expenditures.
"Today’s revenue update gives us more information about the budget problems we need to solve during this current biennium and the next," Frans said in a statement. "The planning estimates for 2022-23 will help decision-makers begin the budget planning process as we continue to respond to the pandemic."
Gov. Walz noted the impacts of the coronavirus pandemic and the national economic recession on the state's finances.
"Minnesota is not alone. States across the country are facing large budget gaps during this global pandemic," Gov. Walz said in a statement. "We have challenges ahead, but we will continue to make smart fiscal decisions and request aid from the federal government to help our state manage this difficult time."
Frans said the planning estimates for 2022-23 should be taken with caution, as several factors could change the revenue outlook.
In a news release, MMB officials said the state would move ahead with August bond sales to ensure that construction projects have the funding to continue.
"In keeping with our sound fiscal management principles, the August bonds sales will save taxpayers’ dollars with our ability to access lower interest rates," Frans said.
MMB is expected to release its next budget forecast in early December.
