·Unlike Wisconsin, Minnesota releases data on revenue collections on a regular monthly schedule, and each statement compares the actual revenue collected with the projected amount (which would be extremely useful for budget analysts in Wisconsin).Fortunately, one of the missing pieces of that data was revealed this monring, as the Wisconsin Department of Revenue finally released October’s figures for the General Fund. And given what the numbers were, I’m wondering why there was such a delay. Yes, income tax revenues are a little odd because Halloween fell on a Saturday instead of a Friday, which means the numbers are adjusted upward to reflect any income taxes that were received in November but actually were withheld in October (November’s figures will likewise be adjusted down to “normal” as a result). But the numbers were quite strong, particularly for income and excise taxes.
· Minnesota releases a comprehensive budget and economic forecast twice a year, as well as quarterly updates on revenue and economic projections. Wisconsin used to issue economic forecasts quarterly, but they are now released just once or twice a year, and budget updates are also infrequent.
· In contrast to Wisconsin, Minnesota’s budget projections look four years ahead (currently through FY 2019) and include estimates of future revenue and spending growth.
· Minnesota regularly transfers money from projected surpluses into its rainy day fund, which at $1.6 billion will soon be more than five times the size of Wisconsin’s rainy day fund ($280 million).
Oct 2015 Gen Fund revenues vs Oct 2014, Wisconsin
Adjusted overall revenues up 6.1%
Income taxes UP 9.35%
Sales taxes UP 1.8%
Corporate taxes UP 9.5%
Excise taxes UP 3.6%
That looks pretty good, other than the sales tax figures (especially since the falling price of gasoline is not subject to sales tax in Wisconsin, so you’d think other sales and their taxes would be going up). But this nice bump in October still leaves us a bit below where we need to be to reach projections for the 2015-16 fiscal year, with the notable exception of excise taxes (insert your own joke why).
FY 2016- revenues to date vs projected increase in budget
Income taxes +6.7% vs 7.1% projected
Sales taxes +1.6% vs. +3.3%
Corporate taxes -4.3% vs -1.1%
Excise taxes +1.1% vs -2.8%
Overall tax revenues +4.0% vs. +4.6%
Of course, this is only 1/3 of the way through the fiscal year, so there is plenty of time to catch up, and given that the approved budget had a projected year-end balance of $161.8 million, and had an extra $135.6 million to play with on top of that (a number which was A BALANCE AND NOT A SURPLUS), there’s no real need to panic about the current state budget (more than you already should have been, anyway).
That being said, November and December are when the major layoffs of late 2015 were announced and/or started to hit, and perhaps that effect will start to be seen on revenues like it has with recent unemployment claims. But for now, I’d put the state’s fiscal picture as “cautiously OK,” for FY 2016 for the time being, with the right to lean pessimistically once/if we actually get updated data from the state.