The first dealt with the inevitable structural deficit that has shown up in the next 2-year budget, after JFC passed the Koo-Koo tax cut. The LFB reported the 2015-17 budget deficit at $505 million, and that's only because the state projects a $670 million surplus to be carried over at the end of this month, which adds up to a $1.175 BILLION DEFICIT OVER THE NEXT 4 YEARS. As I mentioned last month, this surplus is a one-time fluke based on the booming stock market and an end-year bump due to corporations wanting to skip effects of the fiscal cliff, and has almost nothing to do with underlying economic growth in Wisconsin.
The media's finally caught onto this reality, with several articles pointing out the deficit (although some soft-sell it by comparing it to larger structural deficits in the last decade), but few bring up that the only reason the deficit isn't even larger is due to factors that are extremely unlikely to be repeated (unless you think we're going to have Dow 20,000 in months when interest rates go up- good luck with that). Bet on that 2015-17 deficit to be projected higher in the next 12 months.
Another LFB report led to the media discovering that the late-night JFC budget deal is going to lead to higher property taxes across the state. This was something I called when the bill was passed, because I noticed much of the allowed revenue increase for K-12 schools wasn't to be funded by state tax dollars, and immediately knew that higher property taxes were the clear result. So this is what we have to look forward to in the coming years.
As a result of the preceding changes, gross property tax levies are estimated to increase on a statewide basis by 1.7% in 2013(14) and 1.5% in 2014(15), and net tax levies would increase by an estimated 1.7% in 2013(14) and 1.9% in 2014(15). These tax changes would translate into tax bills for a median-valued home estimated at $2,973 in 2013(14) and $3,002 in 2014(15). These represent increases of $29 (0.99%) in 2013(14) and $29 (0.98%) in 2014(15).And sure enough, now the media's figuring this one out, although they are missing the obvious point that if we got rid of even half of the Koo-Koo tax cut and shifted it to schools with the same revenue limit, we could get real property tax relief(ARE YOU LISTENING, DEM LEGGIES?). Combine that with continued cuts in shared revenues, and 2014 shapes up as a year with reduced local services combined with higher property taxes. I sure hope that'll start getting people's attention in FitzWalkerstan.
Compared to the AB 40 [state budget] estimates, gross property taxes would be higher by $25.3 million in 2013(14) and $42.7 million in 2014(15) and net property taxes would be higher by $16.8 million in 2013(14) and $42.5 million in 2014(15). Tax bill estimates are higher by $4 in 2013(14) and $15 in 2014(15); therefore, over the two years of the biennium, estimated taxes on a median-valued home would be $19 higher under ASA 1 than under AB 40.
And now we're seeing another item hit the news that I tipped you off to last month, as veterans group are now angry to find out that JFC Republicans are going to raise their taxes by more than $15 million in the next 2 years. Walker's already trying to run away from this provision (apparently talking to legislators isn't as important as pressing oligarch flesh out of state for Scotty), and Dems on the Assembly's Veterans Committee are asking for the property tax breaks for vets to be resumed. Of course, Scotty's record on dealing with veterans isn't the best, as Mal reminds us of this document that Walker signed putting Tim Russell in charge of funds for fallen veterans- funds that found their way into Russell's pocket and into pro-Walker campaign items.
Lastly, I'd like to thank Mike Ivey of the Cap Times for recognizing something I told you about last month- that Wisconsin was dead last in the nation for jobs over the last 12 months measured, from April 2012-April 2013. Hey Mike, you should just read this page and you'll be getting these "scoops" all the time.
What's funny is that I don't have any inside information to "scoop" our state's media on these stories. The info is hiding in plain sight for those who know where to look (mostly the Wheeler Report, LFB releases and regular national economic data). There's a whole crapload of stuff you can find if you simply break down the LFB papers on where the budget stands now that the JFC is through with it, and I'll probably write some on it if I have the time. So stay tuned, read up, and then impress your friends when you "break news" ahead of the lazy Wisconsin media as the budget and other big economic news comes from Wisconsin these next 2 weeks.