Sunday, September 4, 2011

Walker budget already working- people paying more, corporates less, deficit coming

Those end of the fiscal year revenue numbers finally came out on Friday, conveniently dumped before a holiday weekend. This only shows the numbers through the end of June, but we're already seeing the effects of the Fitzwalkerstani takeover seeping in. As the report notes, one group paid more, and another paid less than expected in May.
Revenues from the individual income tax and the sales and use tax were higher than the estimates by $10.6 million and $19.0 million, respectively. These increases were offset by lower than anticipated revenues from the corporate income and franchise tax ($27.1 million) and the cigarette tax ($15.2 million). The remaining tax sources had smaller variances.
Seems even when put that way, and the FY2011 revenues only came up $12.8 million short of the new and improved revenue numbers revealed last May. (These were the estimates which showed how huge a lie Walker made when he claimed the state was "broke", as $636 million in new revenues for FY2011, 2012 and 2013 were revealed as the result of an improved situation due to the budget passed by Jim Doyle and the Dems in 2009)

Now, the $27 million in lower corporate taxes basically cancels the higher amount of income and sales taxes, but here's the kicker. That $27 million is 3% less than what the LFB expected in May, so apparently companies are more than willing to grab a piece of those tax breaks Walker signed in his first month in office. You know, right before he "dropped the bomb" and claimed that public employees had to sacrifice for a state that had an impossible deficit over the next 2 years? All workers in Wisconsin certainly paid a lot more in over the last fiscal year than corporations, as income taxes went up 10% over FY 2010, and sales taxes went up 4.2% while the state only got 2.2% more out of corporations.

Then you look at the 6 months of the Fitzwalkerstan regime, and the skewing toward workers and away from corporations is even worse. I'll compare January to June figures for the last 2 years.

Inco. tax $3.076B $3.554B +15.5%
Sales tax $2.293B $2.373B +3.5% (slowdown vs. 1st half of FY)
Corp. tax $0.505B $0.489B -3.3%

And the worse part with those lower corporate taxes is that U.S. corporate profits were UP 8.5% over the same time period, and Wisconsin personal income was only up 5.7% Year-over-Year in the first 3 months of 2011 (2nd Q 2011 isn't up yet for Wisconsin.) So either Wisconsin companies are inept, or Walker gave away the farm at the expense of people that actually work, and the workers ended up paying the taxes.

Of course, worse-than-expected employment numbers for 2011 and a falling economy would drop a lot of these revenue numbers. And remember what happened in month 1 of FY 2012? That's right, 8,200 jobs lost on a seasonally-adjusted basis. The allegedly "balanced" budget for 2011-2012 had $14.058 billion in revenues, but this included an $86 million carryover balance, with lower revenues already cutting $12.8 from that (the carryover would be even less if expenses go up above expectations). So let's throw in the $12.8 million drop in FY2011 revenues, and we run the numbers and we find that in order to meet FY 2012's budgeted revenue numbers, the Walker boys need revenues to go up 8.3% for the next 12 months. By comparison, last year's upside surprise netted a 6.4% increase in revenues. Somehow, when you're already losing jobs, seeing a massive increase in public employee retirements and reducing the take-home pay of those left with pre-tax deductions on pensions and health care, I don't think they're making those numbers. And even if they get half that increase at 4.2%, they still miss by over half a billion dollars. That is well over the 0.5% 2-year budget mark to trigger a budget repair bill.

And Friday also revealed ZERO job growth in the U.S. for August, the worst performance in 11 months overall, and with lower revisions to previous months, only 872,000 jobs added for the entire year. The LFB figured there'd be 1.6 million jobs created in 2011, so unless 182,000 a jobs a month are created for the rest of this year (With the Baggers in Congress and teachers not being rehired? HAH!), those numbers will fall short. Nor do I see us hitting 2.7% GDP growth when we've been muddling around 1.5% for the last year and 0.7% in the last 6 months.

So in other words, not only has the worker class gotten the short end of the stick in having to pay taxes under Scott Walker, his "tools" and tax moves aren't going to balance the budget, like his talk radio lackeys like to say it will. And the best part about all this? The first 3 months of revenues will come out from the DOR in late October....about 10 days before Walker's recall petitions can start circulating. There's going to be even more ammo to stock up on to back those petitions up once that budget deficit starts to open up in late 2011.

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