While the state of Minnesota is expected to collect hundreds of millions of dollars more this year in taxes than originally expected, lawmakers appear to be in no rush to spend the anticipated windfall.
Although more money in state accounts is always a good thing, the Office of Management and Budget is reporting the increase is likely due to how and when payments are being submitted, rather than an improved economy, according to an article on MinnPost.com.
MinnPost reports that tax collection in the state is up $85 million this fiscal year and is $722 million above what was predicted in February.
Economist Laura Kalambokidis told MinnPost that she agreed with the decision to hold off on rushing to spend the money.
"When you see a positive variance in a month, meaning when receipts came in more than what we forecast, you might think, 'Oh wow, the economy is growing faster," she told the publication. "Or, you might think, 'Oops, we allocated too little money to that month when actually it's going to come later in the year."
Kalambokidis also told the website that Minnesota is in the same boat as other states when it comes to trying to figure out how the 2017 federal tax reform bill is impacting taxpayers and the way they pay their taxes.
"We're learning as we go here," she said. "All the states that have income taxes are in this same boat of trying to figure out how the Tax Cuts and Jobs Act will affect the timing of individual tax payments."
While the idea of spending the extra money may be enticing to some, the decision is not entirely up to the government. State law requires that one-third of any surpluses reported in another forecast scheduled to be released next month must be put into reserve accounts, according to MinnPost.
After the November forecast is released, Gov. Tim Walz and the legislature can start making changes to the budget.
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