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Lawmakers told economy is on upswing

Published 9:08am Friday, July 26, 2013

ST. PAUL — State officials assured legislative leaders on Thursday that Minnesota’s economy is on the upswing judging by promising jobs figures and tax collections, which will help buy off debt owed to schools and could enable the state to win a credit-rating upgrade.

The officials from the Department of Minnesota Management and Budget testified that tax collections have far surpassed expectations and Minnesota is close to regaining the jobs it lost during the recession. The hearing of the Legislative Commission on Planning and Fiscal Policy involved the most senior lawmakers from both parties.

State Economist Tom Stinson said Minnesota could yield $500 million or more in unanticipated revenue once final calculations are made on a fiscal year that ended June 30. By law, the extra money will pay back schools for hundreds of millions of IOUs the state took on during past budget crises. School leaders will know by the end of September how much is coming their way.

“This is a good story, but I wouldn’t be an economist if I didn’t caution you about getting too euphoric,” Stinson told lawmakers.

He said there are still some soft spots in the national economy and continuing gridlock in Washington has many on edge. He said some of the extra tax payments could be a result of people cashing out stock accounts or claiming bonuses on their 2012 income taxes to avoid getting stung by new high-end taxes that took effect this year.