Hate to say I told you so, but I told you so. Wisconsin is on target for a biennial budget surplus near $215 million for the end of this fiscal year. And no, that doesn't count any additional savings from the budget "repair" bill, as the LFB notes that it isn't in effect, and won't effect any fiscal year that ends in 7 weeks.
Well, how did this happen is we're so "broke"? Biggest reason given is the strong increase in income tax collections, especially given that "payments remitted with returns have increased by almost 35% compared to last year, and refunds are 7.3% lower." So why did this happen? The LFB credits "large gains in the stock market since early 2009 and improved business profits of pass-through entities...that are taxed under the individual income tax." In others words, "Thanks Obama!" for the big runup in stocks and stability in the job market, and "Thanks Jim Doyle and Legislative Dems!" for reducing the state's write-off for cap. gains from 60% to 30% in the last budget (guess that "disincentive" didn't keep gamblers from locking in gains, eh?). You know, the cap. gains exemption that Walker and co. want to turn from 30 to 100% on long-term holdings and on using the proceeds for God knows what in a business? Yep, that one.
An interesting sidelight of the LFB report is a drop in sales and corporate tax revenue, partly due to a consumption slowdown in things that have sales taxes in Wisconsin (which doesn't include groceries and gas, by the way), and because of Scotty's giveaways at the start of the year to corporations. This actually lowers the rev's by $193.4 million for the upcoming biennium, or else we'd really be in good shape. Of course, the LFB assumes that economic activity will continue at a decent growth pace when significant amounts of the population are seeing take-home paycuts and services for needs like health insurance are being slashed. Somehow, I doubt this would be true, unless Obama's record on the economy in the next 2 years ends up even better than it has been so far (which is something I bet Republicans like Walker and WMC do NOT want to see, because it means landslide 2012).
Lastly, the LFB says there is a projected budget surplus of nearly $660 million for 2011-2013 based on these better revenue projections and Walker's proposed budget. But again, this assumes that all the K-12, university, transit, medical service, and local government aid cuts will have no effect on the revenue side or in the state's overall economic growth. And as mentioned, that won't happen, and you wouldn't like to find out what the real result would be.
You know, I'll stop harping on this topic when WisGOPs stop lying about our state's fiscal situation. Don't bet on it happening in the next couple of months, but that'll just fuel the recalls from the majority of us in the reality-based community. In the meantime, it's more ammo for my trip to the Capitol on Saturday.
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