First of all, let's go over why the Legislative Fiscal Bureau didn't give the GOP its magic pot of gold.
For 2014-15, the January estimates projected tax collection growth of 3.7% over 2013-14. Through April, 2015, year-to-date collections are running at 3.3%. As tax processing is completed and the remaining months of collections are realized, the year-to-date growth rate should increase somewhat, and it is possible that 2014-15 collections may exceed the January estimate. However, IHS Global Insight Inc.'s recent forecasts of the U.S. economy have been downgraded from the January forecast, which was used in preparing the current tax revenue estimates. Most significantly, the April forecast of growth in national personal income is lower than the January forecast by 0.5% in calendar year 2015, 0.6% in 2016, and 0.2% in 2017. The forecast of growth in personal consumption expenditures has been decreased by 0.7%, 0.2%, and 0.1%, respectively, for those three years.So quick math indicates that the underlying increase in April revenues was around 4.85% vs April 2014 (this is after adjusting for $165 million in extra money due to lower tax refunds, and I took commenter GeoffT's suggestion and added $27.5 million for extra withholding). If the last 2 months hold out at that 4.85% increase, then you'd be within a few million of the LFB's January estimates.
Therefore, if there is any additional revenue in the current year, it will likely be offset by reduced growth rates in 2015-16 and 2016-17. On balance, we believe that the current estimates for the three-year period are still reasonable and should not be adjusted.
But even if those numbers are hit, that doesn't automatically mean our current fiscal year is guaranteed to balance out in the next 8 weeks with those flat revenues, because overall General Fund spending is up 6.2% through the end of April vs Fiscal Year 2014. If total expenses end up being 6.2% above Fiscal 2014 levels, then that's an amount that's $171 million ABOVE what the Governor said would be 2015 expenses in the Budget in Brief, which was the only way that there wouldn't be a need for a budget repair bill to handle this year's budget hole. Now, maybe a lot of that was already taken care of with the plans to skip a $108 million debt payment this month, but I still am not so sure we won't end up in the red by the end of the year. I'd like to see a bit more questions being asked about that as the fiscal year draws to a close.
And of course, not having any additional revenues for 2015-17 means there are now going to have to be creative ways to find some kind of extra money to fill in any of the numerous budget holes and "we'll figure it out later" elements in Governor Walker's poser budget. As I mentioned earlier this week, the budget has nearly $1 billion in lapses already built into it, and features numerous tricks such as pushing 2 years of the school tax levy credit into 2016-17. This is the only way year 1 is able to balance with the lower revenue figures, and that's what makes the WisGOP response of "Oh, we'll find the money to fill in the $127 million cut to K-12 funding in the next fiscal year" all the more intriguing.
Assembly Speaker Robin Vos, Senate Majority Leader Scott Fitzgerald and JFC Co-chair John Nygren said they planned to grab money the guv set aside for the school levy credit to help wipe out a $127 million cut in categorical aids in the first year of the biennium. And Walker said he's on board with prioritizing education funding.(By the way, nice "tell" from Scotty in that statement- he's admitting that he shortchanged schools in his original budget. Dimwit.)
"We'll make sure all of our public schools are made whole going forward," Walker told reporters following a memorial service in Milwaukee for fallen law enforcement members.
How are they going to grab money from a school credit that has extra funding in all of 2016-17 to fill in a cut that takes place in 2015-16? Are they just planning to delay a payment to schools until July, so it falls in the next fiscal year, and continue the merry-go-round in future years? That on its face isn't the end of the world, but it'll drive up the GAAP deficit another $250 million, and will make districts have to run on some fumes until the check comes in at a later date. The other option on the spending side is to cut other items in the first year of the budget, and if that source isn't something like WEDC, I can't see this working out very well for the vast majority of Wisconsinites.
Wait, we got a nice upside surprise on the Transportation Fund a few weeks ago and there's $84 million that could be used there! Maybe we can use that? One problem. The Road Builders Amendment from last November prevents that from happening. Funny how those nice-sounding measures always seem to bite you in the ass right when you're looking for help.
Of course, there's an easy solution that the ALEC crew will never consider when it comes to solving their self-caused budget crisis and crippling austerity budget. All they have to do is listen to Democrats and taking Obamacare money.
The Dems suggested instead of giving homeowners a property tax cut of $5 in each year of the biennium, that money should go toward school funding. They also suggested a delay of fully implementing the manufacturing an ad credit could save $226 million in the upcoming biennium and noted the break is going to cost $400 million more than originally expected.Combine those two items, and that's at least $560 million in savings that not only takes care of the K-12 reductions, but it also fills in the $300 million cut to the UW System. Taxes would not go up one cent with those two moves, and you'd even have money left over to help local governments make ends meet and reduce reliance on property tax increases, or handle a number of other items.
"If your priority is tax breaks for corporations and so on and so forth, fine, that's your priority," Erpenbach said. "Our priorities are making sure you pay for our schools first, making sure you pay for UW first. There is absolutely nothing wrong with taking the Medicaid expansion."
But why would we ever expect this Wrecking Crew to do the responsible thing when they can stir up the emotions of dead-end suburb trash by wasting millions of taxpayer dollars in an effort to limit what a poor person can buy with food stamps? As I said yesterday, do you wonder why Wisconsin is such an economic mess when the WisGOPs in charge have priorities like that?