Minnesota collected more taxes than expected in the latest quarter, a bright sign ahead of a comprehensive budget forecast due in early December.
But Minnesota Management and Budget officials warned Wednesday that another recession is likely if Congress can't avoid deep spending cuts and tax increases at the start of 2013.
Their report says the state took in an extra $145 million from July through September, or 4 percent better than expected, as taxes on individual incomes, sales, corporate incomes and other items were all up.
Revenues for the current two-year budget period are now $444 million above expectations, but any surplus by law must go toward catching the state up on school aid checks.
The economic update doesn't show whether the state is spending more or less than predicted.