We asked, the MN Office of Management and Budget to clarify an important question, which is how much of the $9.253 billion surplus was generated from Personal Income Tax. We will be clear, we thought this was a simple question, only to find out it was not. After waiting for over a day we received an email which attempts to spell it out.
Now, we ask this question as an informed position in light of Senate Majority Leader Jeremy Miller’s (R-14, Winona) constant statement, regarding the surplus as a result of over taxation. Well, truthfully, only a little more than 1/3 of the surplus is accumulated in this way. As you will see below $3.4 billion of the $9.253 billion stems from income tax, which is only 36.74%.
As negotiations move forward, we hope there will be more truth in advertising and a less rhetoric filled discussion. Granted, we know this is an election year, and everyone in leadership is trying to score electoral points, but when the truth is known and published here on Checks & Balances let the talks move forward with a common understanding on what those numbers actually are.
Here is the email we received from Patrick Hogan, Director, Enterprise Communications and Marketing | Communications and Planning
I think this illustrates why the answer to your questions is more complicated than one might at first think.
When the FY 22-23 budget was enacted, $127 million was left on the bottom line. As of the February 22-23 forecast, the 22-23 biennium is expected to end with a $9.253 billion surplus (this amount has shrunk and will shrink more as bills are enacted this session – in other words, the surplus fluctuates over time and as legislators make spending decisions). The growth in expected balance was generated by several components:
- FY 21 concluded with $3.1 billion more on the bottom line than expected, and this amount carried forward into FY 22-23. Of that FY 21 higher balance, $331 million was generated by lower than expected spending and $2.775 billion was higher than expected revenue, $1.5 billion from income tax, $656 million from corporations and $336 million from sales; the remainder from other revenue sources (https://mn.gov/mmb-stat/documents/budget/operating-budget/forecast/nov-2021/nov21fcst-fba-detail.pdf)
- The remaining $6.2 billion in higher balance is from $631 million lower spending and $6.4 billion higher expected revenue, offset by $995 million in higher reserve balances due to statutory allocations. Of the revenue change, $3.4 billion is from higher income tax receipts, $1.3 billion is from higher corporate receipts, $1 billion is from higher sales receipts. The remaining difference is from smaller revenue sources. For more detail, the reporter can compare the column labeled “Feb FY 2022-23” from this document with the column labeled “SS1 FY 2022-23” from this document.