With the acquittal in the killing of Dontre Hamilton taking up a lot of the interest of the media in Wisconsin’s largest media market, it allowed the Walker Administration to drop the report of the state’s November tax revenues on Monday. And as I figured, the reason they were hiding the numbers are because they're not good, as overall tax collections were down even more in November, and for the fiscal year as a whole. We’ll use the adjusted figures from the Department of Revenue, as they reflect end-of-the-month money that was earned in November, but wasn’t counted until December due to the 30th being over a weekend.
Wisconsin Gen. Fund Tax Revenues, FY 2014 vs FY 2015, YTD
FY2014 $5.258 billion
FY2015 $5.113 billion (-2.8%)
Income taxes have been really off, down 7.3% in November 2014, and 6.3% for the first 5 months of Fiscal Year 2015. That being said, some of that can be explained due to the decrease in withholdings that was done to "show" people the effect of the Koo-Koo tax cuts from 2013, along with other gimmicks. Based on LFB projections, this means that $55 million a month is not being taken out at this time in FY2015 vs FY2014, so we should add that to the income tax totals to get a true idea on how things look (it's also fair to adjust upwards because tax refunds will be less in early 2015 to make up for the lower withholdings. Cool, huh?).
When you add $275 million in income taxes to the total, it turns that number to a positive, but not by much (2.3%). This is well behind the 6.21% increase in income taxes for 2014-15 that the DOR projected in its estimates last month. That report still projected a $132 million shortfall between now and June 30, even with the rosy revenue figures.
Let’s plug in the adjusted year-to-date 2.3% increase in income taxes along with the strong 4.94% increase in sales taxes (this is the one good part of the revenue report), and assume corporate taxes get out of its current 5.9% hole and wind up being even with 2014’s figures. With excise and other taxes largely barely below predictions (I'd estimate them to be $20 million above last year's total, which would be $4.1 million short of the DOR estimates in total), here’s what revenues end up being in comparison with the DOR estimates.
Income tax -$276.0 million
Sales tax +37.2 million
Corporate tax -$41.1 million
Excise and al other taxes -4.1 million
TOTAL SHORTFALL $284.0 million
Add that $284 million shortfall on top of the $132 million we're already short, and that number becomes a $416 million hole that must be made up in the next 6 1/2 months. It also leaves us further in the ditch for the next budget, above the $2 billion in deficits that I estimated at the end of last week.
Can't say we didn't try to warn you when it happened, and when the election campaign was going on. But apparently too many people were paid off to tell the truth, and too many others were too gutless to ask when the bill was going to come due from these Election-based tax cut stunts. And now we're all going to suffer the consequences for this fiscal recklessness.