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Minnesota Staring at $2.4 Billion Budget Gap as Revenue Slides

May 5, 2020, 8:51 PM

The Minnesota budget authority warned of a big shortfall in its latest projections, and Colorado extended its tax deadlines to May 20. Here’s the latest on shifting state tax guidelines, deadlines, and policy to deal with the coronavirus pandemic. For Monday’s coverage click here. Here’s a state-by-state roadmap.

Minnesota faces a $2.4 billion budget hole as tax revenues crater in response to the Covid-19 pandemic, the state’s primary budget forecasting agency reported Tuesday.

Minnesota Management and Budget released a budget projection showing revenues would likely drop $3.6 billion over the course of the two-year period that ends on June 30, 2021. The new report suggests a swing of $4 billion from a projection released in February that showed the state sitting on a $1.5 billion surplus. The decrease is “primarily due to projected declines in wage and non-wage income, including capital gains and business income.”

The report states Minnesota enjoys a budget reserve cushion of $2.3 billion that could “mitigate the budgetary impact of the crisis.” But “given the uncertainty about the path of pandemic, the economic outlook will remain volatile for some time.”

Colorado Extends Extension

Colorado has continued its extension for filing and remitting state and local taxes that are administered by the state until May 20.

The continuance, put into effect by an executive order Gov. Jared Polis (D) signed Monday, is designed to bring relief for businesses hard hit by the dual threats of the pandemic and the ravaged economy, Polis said.

“The economic impacts of Covid-19 are significant, and threaten to undermine the economic stability of many Coloradans and local businesses,” he said in the order. “Employers and employees in virtually all sectors of the economy have been hard hit. We must take action to shore up economic security, employment, community cohesion, and community recovery including showing flexibility with tax payments.”

Made with Flourish

To contact the reporters on this story: Tripp Baltz in Denver at abaltz@bloomberglaw.com; Michael J. Bologna in Chicago at mbologna@bloomberglaw.com

To contact the editors responsible for this story: Jeff Harrington at jharrington@bloombergtax.com; David Jolly at djolly@bloombergtax.com

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