Distributions from tax deferred retirement accounts were assumed to increase at the rate of growth in private pension income. The small, 0.8 percent, increase in revenues reflects a modest improvement in DRI's outlook for growth in consumer durable spending and business capital equipment purchases, the two largest components of Minnesota's sales tax base. Minnesota's share of total U.S. sales also increases, reflecting the slightly stronger projections for the state economy. DRI's outlook for corporate profits has changed little from November. Corporate profits are expected to grow only slightly in 1997 and 1998, following the strong profit growth observed in 1995 and 1996.
Corporate profits remain the most volatile of all state revenue sources.
DRI has reduced their forecast for the dollar volume of sales of motor vehicles and parts from November's estimate. State of Minnesota Department of Finance 400 Centennial Office Bldg.