Minnesota tax revenues 20 percent higher than forecast
As tax revenues beat forecasts, there is no good case to be make for tax hikes, if there ever was one.
Today Minnesota Management and Budget released their biannual Budget and Economic Forecast. The state’s economist projected a $1.332 billion state surplus, and that’s after sending $284 million to the budget reserves.
Why it’s good news: This means the economy has been growing, largely due to pro-growth tax cuts at the federal level, aka the Tax Cuts and Jobs Act.
Why it’s bad news: Taxpayers have been sending more of their hard-earned money to state government than is required to fund the (already bloated) budget. Tempting politicians with a bunch of “extra” cash is never good for fiscal restraint.
Economist John Phelan explains more in the video below:
In response to the surplus announcement, Phelan released the following statement to the media:
“We can attribute this budget surplus to economic growth driven by federal tax cuts. This shows again that pro-growth policies are more effective at generating revenue than confiscatory taxes. There is absolutely no argument for tax increases with such a large surplus.
“This doesn’t mean lawmakers should go on a spending spree. Weakening manufacturing indicators driven by federal trade policy, coupled with slower employment growth, shows that we cannot take economic growth for granted.”