The ongoing strength of the state budget adds a positive note to state aid programs for cities.
The state received additional positive budgetary news last week as Minnesota Management and Budget (MMB) released its monthly Revenue Review. The strong showing offers continued assurance that cities will receive their expected local government aid in 2021.
According to the report, Minnesota’s net general fund receipts for the month of January are now estimated to total $2.403 billion, which is $296 million (14.1%) more than projected in the last full state budget forecast in December. For fiscal year 2021, year-to-date receipts are now $459 million (3.5%) more than forecast.
The higher-than-expected revenues were achieved because individual income tax, sales tax, and corporate income tax collections exceeded the forecast.
Previous reports also strong
The December state budget forecast had already reported substantially better budget news, largely due to higher-than-projected revenues. A deficit projected in May 2020 for the remainder of the current biennium was erased, and a positive budgetary balance of $636 million was projected.
The Legislature reduced that positive balance to $393.5 million in December with an additional pandemic relief bill that appropriated $242 million. The money went largely to businesses impacted by the pandemic.
MMB will release the next full state budget forecast around March 1. It will serve as the basis for any short-term budget changes and for the 2022-2023 biennial budget.