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Budget & Economic Forecast

Budget & Economic Forecast. February 2014. MINNESOTA MANAGEMENT & BUDGET mmb.state.mn.us. February 28, 2014. February Forecast Summary. $825 million budget balance grows to $1.233 billion for FY 2014-15 Growth in income and sales tax collections contribute to revenue forecast

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Budget & Economic Forecast

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  1. Budget & Economic Forecast February 2014 MINNESOTA MANAGEMENT & BUDGET mmb.state.mn.us February 28, 2014

  2. February Forecast Summary • $825 million budget balance grows to $1.233 billion for FY 2014-15 • Growth in income and sales tax collections contribute to revenue forecast • U.S. economic outlook improves • Long term budget outlook remains positive

  3. Revenue Gain, Lower Spending Add to Forecast Balance

  4. U.S. Economic Outlook has Improved U.S. Real GDP Annual % Change Source: IHS Global Insight

  5. Near-term Federal Policy Uncertainty is Reduced August 2011 Debt Ceiling Dispute September 2001 9/11 Source: Baker, Bloom, & Davis

  6. Consumer Confidence is Improving October 2013 Government Shutdown & Debt Ceiling Dispute August 2011 Debt Ceiling Dispute September 2008 Financial Crisis Source: IHS Global Insight (GI); Reuters/University of Michigan

  7. Total Minnesota Adjusted Gross Income (AGI)* Source: Minnesota Department of Revenue; Minnesota Management & Budget (MMB)

  8. Revenues Up Slightly From Previous Estimates

  9. Uncertainties Remain • Harsh weather clouds economic signals • Jobs • Manufacturing • Construction • Non-wage income adds revenue volatility • Recent higher-than-expected tax payments

  10. Small Decrease in Projected Spending

  11. Planning Estimates Improve Slightly * Spending not adjusted for general inflation (CPI) – adjusting for inflation would increase spending by $1.068 billion ($342 million in 2016 and $726 million in 2017)

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