A big upside in revenues likely to change what can be done in this Wisconsin budget

It slipped out yesterday, without a lot of fanfare, but Tuesday's release of a surprising April revenue report for Wisconsin will likely reset the decisions that are made in the state budget in the next 2 months.

The reason why is that both income taxes and corporate taxes came in very strong after the tax season, indicating that a lot of people were paying their taxes in April (likely because they owed vs getting refunds). As a result, those two areas are coming in well above what the Legislative Fiscal Bureau estimated in January.

Year over year change thru April, vs LFB Jan estimates
Income Tax
Actual +5.7%
LFB Projection +1.9%

Corporate tax
Actual +63.6%
LFB Projection +10.75%

If those increases hold for the next 2 months, that would mean income taxes would come in around $322 million above the LFB projections, and corporate taxes would exceed the LFB by a whopping $472 million. That's nearly $800 million combined,

Now everything isn't great in the revenue picture, as sales taxes are only up 3.9% for the fiscal year, which is behind the LFB projection of 4.9% growth. But that only would be a shortfall of about $55 million, which still means an upside of nearly $750 million, and would also likely increase the amounts for the 2 years of the 2019-21 budget, due to a higher base.

The LFB is expected to give updated revenue projections for the biennial budget this week. In addition to the higher numbers, perhaps we will see an explanation as to why the figures jumped so much in April, and whether they should be expected to continue as a fallout of the new tax law that raised federal income tax payments for so many Wisconsinites.

It also will mean there is a whole lot more money available to pay for provisions in Governor Evers' state budget. Remember that there is currently a $1.4 billion hole in the budget after the GOPs on the Joint Finance Committee submarined Medicaid expansion nd refused to reverse tax cuts on the rich and corporate last week. But if there's $800 million more to carry over, now Evers' request for $1.6 billion in addition K-12 and special education funding is attainable. There also could be an opportunity to transfer a lot of money into the Transportation Fund to start filling all of the Scottholes that have appeared in Wisconsin.

In addition, the $15 million that was taken away from state shared revenue payments by the GOPs on the Joint Finance Committee becomes quite available now, and could be an opportunity to cut property taxes in a more healthier and sustainable way than the shell games that are currently going on. Given that it isn't worthwhile for many Wisconsinites to write off property taxes to the IRS any more, it seems some adjustment to our property tax-based local finance system needs to be adjusted anyway.

It's time to pay attention to what the GOPs in the gerrymandered Legislature choose to do with this likely one-time revenue bump. If they refuse to use this as a chance to make up for the negligence they've imposed on the state over the last 8 years, they deserve to be roasted and removed for refusing to keep Wisconsin economically competitive through investments in infrastructure, communities and quality of life that are clearly able to be paid for.