Higher revenue collections offer a glimmer of good news as cities prepare preliminary budgets and levies.
As cities prepare to set their preliminary budgets and property tax levies for 2021, the state released some positive budget news on Sept. 10 with the monthly revenue memo for August.
According to Minnesota Management and Budget, net general fund revenues for the state totaled $1.571 billion for the month of August, which is $202 million (14.8%) more than projected in the May Interim Budget Projection.
For the first two months of the 2021 fiscal year, general fund revenues are now $2.903 billion, which is $380 million (15.1%) more than projected.
State reserves still available
The May Interim Budget Projection, which was prepared to begin to analyze the economic impacts of the pandemic, indicated the state would end the current biennium on June 30, 2021, with a deficit of roughly $2.426 billion.
In that projection, state general fund revenues were expected to be $3.611 billion lower than what was projected in the February 2020 Budget and Economic Forecast.
The state’s $2.359 billion budget reserve remains available to mitigate the budgetary impact of the crisis and would have to be depleted before unallotment reductions in state appropriations could be implemented.
A word of caution
The monthly revenue collection memo cautions that monthly revenue collection figures should be interpreted with caution since variations in the timing of tax collections and tax refunds can impact the reported monthly revenues.