Friday, December 21, 2012

DOR says Walker will fall short...and they're being nice

In addition to the Wisconsin jobs numbers, the Wisconsin Department of Revenue released the Wisconsin Economic Outlook yesterday. And yet again we saw that Scott Walker's promise of bringing 250,000 jobs ain't going to come close to happening.

The DOR predicts about 118,000 private jobs will be added in Wisconsin from 2010-2014, less than half of 250,000. And even then, that number is charitable, because if you go inside the numbers and go to Page 9, it gives a rosy scenario of short-term Wisconsin job numbers that aren't holding up.

Wisc. Economic Outlook- jobs forecast vs. reality
Q3 2012 forecast- 2,771,600 total, 2,364,200 private
Sept. 2012 jobs- 2,728,200 total, 2,317,500 private

Q4 2012 forecast- 2,779,100 total, 2,371,900 private
Nov. 2012 jobs- 2,731,700 total, 2,323,100 private

So that's a gap of 48,000 jobs at the end of November between the Economic Outlook's forecast and the reality, and it also means more growth is needed to catch up. So if you use the Economic Outlook's projections of 2% private sector job growth in 2013 and 1.4% in 2014, and put it to the November 2012 job figures, the state ends up with just over 2,400,000 private sector jobs at the end of 2014, which ends the total job growth in the 4 years of Fitzwalkerstan at...less than 80,000. Not exactly 250K, is it?

This looks especially bad when you look at the private sector Walker jobs gap. If Wisconsin had merely created jobs at the same pace as the rest of the country, we'd already be at 89,000 private sector jobs, and might have a shot at the 250,000 level by the end of 2014.

And the Wisconsin Economic Outlook tells a similar story of Wisconsin lagging when it comes to personal income. As mentioned previously, Wisconsin was outperforming its Midwestern rivals when it came to income growth when Walker took over, and now we have fallen behind both the Midwest, and the nation as a whole.
The first decline of personal income in 50 years was revised down to 3.0% in 2009. This compares to larger declines in the Great Lakes region (-4.9%) and nationwide (-4.8%) during 2009. BEA revisions show personal income grew 3.5% in 2010 and 4.5% in 2011. Wisconsin personal income recovery in 2010 was stronger than the Great Lakes region but weaker than the average nationwide growth. In 2011, the state posted slightly lower personal income growth (4.5%) than the Great Lakes region (5.0%) or the U.S. (5.1%)....

The outlook calls for Wisconsin personal income to grow 3.2% in 2012 and 3.7% in 2013, slightly below the growth of national personal income.
And again, the DOR gives optimistic figures for Wisconsin to get to that point. This week's state-by-state personal income stats show that Wisconsin would need to get an increase of 1.0% for the 4th quarter of 2012 just to reach the DOR's levels. And the state has only exceeded 1.0% for any quarter once since Act 10 took effect in March 2011- in 1st Quarter 2012, when income tax refunds and annual raises inflate the numbers. So if they fall short there, they'll be more likely to fall short in 2013 as well.

 This is an important point to bring up, because when the LFB does their revenue estimates in the next month, they use the Wisconsin Economic Outlook and national economic trends to figure the appropriate levels of revenue growth (or decline) that is then used as a baseline for the budget. If Wisconsin is falling short in employment and incomes, even with the overly-positive forecasts from the DOR, it's going to be likely that the revenue figures also end up low, and Walker's already fraudulent claim of a balanced budget will come apart.

Keep your eyes on this one, and prepare to laugh when the news comes down later this winter.

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