While all of the other hoopla has been going on at the Capitol and in other parts of Madison this week, Scott Walker’s Department of Revenue slipped out the 1st Quarter revenues for Fiscal Year 2016 (they were only about 3 weeks overdue).
At first glance, the numbers seem OK.
Revenues, change vs 1st 3 months of FY 2015
Income Tax +5.55%
Sales Tax +1.53%
Corporate Tax -5.87%
Excise Taxes -0.2%
However, then you compare that with what is needed to match the figures in the finalized budget for 2015-16, and it’s not so good.
Revenues, change needed to match FY 2016 budget
Income Tax +7.27%
Sales Tax +3.31%
Corporate Tax -1.08%
Excise Tax -2.93%
Obviously, 4.58% is more than 3.10%, so we’re running a bit behind early on. The sales tax lags are especially concerning, partly because that reflects much of Wisconsin's tourist season, and also because you would think those numbers would be higher, given the lower gas prices of the last year (gas isn’t subject to sales tax in Wisconsin, while most other consumer items are, so theoretically there would be more spending on the other items).
That being said, there is a little extra money to play with to handle small revenue shortfalls for the time being. The Annual Fiscal Report showed that the state ended the 2015 Fiscal year with a net balance of $135.6 million. While that still was a one-year deficit of just over $381 million, since we started 2014-15 at $516.9 million (and don’t let any GOP tell you otherwise), it’s also more than $135 million above what was projected in this 2015-17 budget when it was signed in July. So add that to the cushion that was built into the budget after vetoes, and here’s what things looked like going into this Fiscal Year.
General Fund balances.
Ending balance in 2015-17 budget $131.4 million
PLUS end FY 2015 balance $135.6 million
TOTAL CUSHION: $267.0 million
Sounds good, but let’s not forget that this number is also with the $1.1 billion in lapses built into the budget, which is well beyond what is lapsed in a typical two-year period. So add in any kind of revenue shortfall to that, and we're still looking at significant cuts yet to come in about a year on top of what has already hit many a school district, the UW System, and many local governments.
So while we shouldn't panic and think this already-bad budget is in even worse shape, the first three months of revenue figures are a bit ominous and below what they need to be at. But for now, I'd just say keep an eye on it...if the Walker Administration will actually release the data of course.