It wasn't done as an intentional Friday afternoon news dump, but the Wisconsin DOR came out with its February revenue figures yesterday, and much like Janaury's numbers, it wasn't very good.
For income taxes, they were down 57% from last February, but the DOR rightly points out that February and March income tax numbers can be misleading, because "70,705 more people [filed] their income tax returns electronically in February 2012 than they did in February 2011", and that meant there were a lot more refunds sent back (I was one of those). This would reduce the total income tax amounts given out, and may not reflect people working and wage amounts, although I'd argue that the large amount of refunds go directly to the bad job performance in Fitzwalkerstan and the hundreds of thousands of workers who had their take-home pay cut in the middle of the year. These people had income and taxes taken at a much higher level at the start of the year than their full-year earnings would indicate, and the refunds would make up that difference. Act 10 and other Fitzwalkerstani policies prove again to be the gift that keeps giving, doesn't it?
A better indication is the year-over-year trend, and that's going in the wrong direction, especially in the last 5 months. This means that we're heading toward a growing revenue shortfall, based on the state budget's projections.
Wisconsin income tax collections 2011 vs. 2012
Budget projection, FY 2012 vs. FY 2011 - +2.5%
FY 2011 thru Feb. vs. FY 2011 thru Feb. - +2.4%
Last 5 months 2012 vs. Last 5 months 2011- +0.7%
First 2 months 2012 vs. First 2 months 2011- DOWN 6.87%
And recall this time last year that income tax revenues were picking up, leading to the infamous Fiscal Bureau revenue upside surprise last May which proved Walker's "budget crisis" requiring Act 10 to save his "broke" state was a total lie.
By comparison, the LFB mentioned last month that low revenues are a big reason behind the $208 million deficit that will have to be made up in the next 16 months, probably in the form of another budget repair bill. We're actually below those 2011 tax levels for the first 2 months of last year, so while the income tax gap right now would only be about $5 million or so for this fiscal year, that could well grow these last 4 months.
The bigger indicator of trouble is sales tax revenues. February 2012 had 1 more day than February 2011 due to Leap Year, so you'd logically assume a 3.6% increase in sales taxes, all things being equal. Yeah, that didn't happen.
Wisconsin sales tax collections 2011 vs. 2012
Budget projection, FY 2012 vs. FY 2011 - +3.91%
FY 2012 thru Feb. vs. FY 2011 thru Feb. - +3.16%
Last 5 months 2012 vs. last 5 months 2011 - +2.88%
Feb. 2012 vs. Feb. 2011 - DOWN 1.95%
Now you can chalk this up to the Packers not winning the Super Bowl this time or there not being history-making protests in Madison for this February. But that alone shouldn't account for a drop of $571,000 in sales taxes A DAY, which is what we got for this February. A 0.75% gap in sales taxes vs. the budget would mean another shortfall of about $32 million, and I don't think we're going to see the fiscal boost from protest coverage like we did last year.
Another place we're coming up short is excise taxes, which go on items like cigarettes, alcohol and other types of sins. While I try to keep up on the beer side, looks like others were not doing the same in the first 2 months of the year (then again, given the crowds out last week, I wouldn't be shocked to see a slight uptick for March :P)
Wisconsin excise tax collections, 2012 vs. 2011
Budget projection, FY 2012 vs. FY 2011 - +1.99%
FY 2012 thru Feb. vs. FY 2011 thru Feb. - DOWN 3.48%
Last 5 months 2012 vs. last 5 months 2011 - DOWN 5.06%
Feb. 2012 vs. Feb. 2011 - DOWN 4.55%
If we stay 5.5% below budget projections on excise taxes, that's another $40 million that we come up short. So smoke and drink up, will ya!
Lastly, Walker's corporate tax cuts have barely started to take effect, and we're already seeing it cost the state money. Despite the U.S. corporations having record profits in late 2011 as they hoard money instead of paying wages, Wisconsin hasn't seen that translate into better corporate revenues.
Wisconsin corporate income taxes, 2011 vs. 2011
Budget projection, FY 2012 vs. FY 2011 - +3.28%
FY 2012 thru Feb. vs. FY 2011 thru Feb. - DOWN 0.49%
Last 5 months 2012 vs. last 5 months 2011 - DOWN 7.60%
First 2 months 2012 vs. First 2 months 2011- DOWN 21.52%
That's a fun thing to see if you're still doing your taxes, isn't it? Knowing that profits are at record levels and seeing Wisconsin corporations paying fewer taxes on those profits. Amazing how that works out when you have a corporate puppet occupying the key spots in the Capitol.
If we somehow reverse the corporate tax shortfalls of the last few months and only stay at that 3.77% shortfall that we're at for this fiscal year, that means another $33 million below estimates. So let's add up the Walker revenue deficit sheet so far:
Income tax - $5 million
Sales tax - $32 million
Excise tax - $40 million
Corporate tax- $33 million
TOTAL SHORTFALL $110 million
In other words, a little more than the $103 million loss the Fiscal Bureau anticipated for this year, and that's assuming the negative trend for 2012 reverses enough these last 4 months. If it doesn't, that $208 million 2-year deficit will only grow bigger, and there will be another budget repair bill by the start of 2013. But this time, there will be a lot of new faces in the Legislature required to fix it and maybe they won't waste time on castle doctrines and abortion like the last one did. I also hope at that time we have a new Governor that is willing to stop giving away the store to corporate contributors at the expense of state revenues, economic growth, and needed services, because the current one has been doing just that, and it has failed by any measure.
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